Correlation Between Hershey and Cembra Money
Can any of the company-specific risk be diversified away by investing in both Hershey and Cembra Money at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Hershey and Cembra Money into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hershey Co and Cembra Money Bank, you can compare the effects of market volatilities on Hershey and Cembra Money and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Hershey with a short position of Cembra Money. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hershey and Cembra Money.
Diversification Opportunities for Hershey and Cembra Money
-0.34 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Hershey and Cembra is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding Hershey Co and Cembra Money Bank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cembra Money Bank and Hershey is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Hershey Co are associated (or correlated) with Cembra Money. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cembra Money Bank has no effect on the direction of Hershey i.e., Hershey and Cembra Money go up and down completely randomly.
Pair Corralation between Hershey and Cembra Money
Assuming the 90 days trading horizon Hershey Co is expected to under-perform the Cembra Money. In addition to that, Hershey is 3.06 times more volatile than Cembra Money Bank. It trades about -0.01 of its total potential returns per unit of risk. Cembra Money Bank is currently generating about 0.04 per unit of volatility. If you would invest 8,110 in Cembra Money Bank on September 29, 2024 and sell it today you would earn a total of 65.00 from holding Cembra Money Bank or generate 0.8% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.24% |
| Values | Daily Returns |
Hershey Co vs. Cembra Money Bank
Performance |
| Timeline |
| Hershey |
| Cembra Money Bank |
Hershey and Cembra Money Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hershey and Cembra Money
The main advantage of trading using opposite Hershey and Cembra Money positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hershey position performs unexpectedly, Cembra Money can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Cembra Money will offset losses from the drop in Cembra Money's long position.| Hershey vs. Cembra Money Bank | Hershey vs. Ameriprise Financial | Hershey vs. Cincinnati Financial Corp | Hershey vs. Playtech Plc |
| Cembra Money vs. Wheaton Precious Metals | Cembra Money vs. AMG Advanced Metallurgical | Cembra Money vs. CNH Industrial NV | Cembra Money vs. GreenX Metals |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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