Correlation Between CHRYSALIS INVESTMENTS and United Utilities
Can any of the company-specific risk be diversified away by investing in both CHRYSALIS INVESTMENTS and United Utilities 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 CHRYSALIS INVESTMENTS and United Utilities into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CHRYSALIS INVESTMENTS LTD and United Utilities Group, you can compare the effects of market volatilities on CHRYSALIS INVESTMENTS and United Utilities 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 CHRYSALIS INVESTMENTS with a short position of United Utilities. Check out your portfolio center. Please also check ongoing floating volatility patterns of CHRYSALIS INVESTMENTS and United Utilities.
Diversification Opportunities for CHRYSALIS INVESTMENTS and United Utilities
0.06 | Correlation Coefficient |
Significant diversification
The 3 months correlation between CHRYSALIS and United is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding CHRYSALIS INVESTMENTS LTD and United Utilities Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on United Utilities and CHRYSALIS INVESTMENTS 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 CHRYSALIS INVESTMENTS LTD are associated (or correlated) with United Utilities. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of United Utilities has no effect on the direction of CHRYSALIS INVESTMENTS i.e., CHRYSALIS INVESTMENTS and United Utilities go up and down completely randomly.
Pair Corralation between CHRYSALIS INVESTMENTS and United Utilities
Assuming the 90 days horizon CHRYSALIS INVESTMENTS LTD is expected to generate 1.63 times more return on investment than United Utilities. However, CHRYSALIS INVESTMENTS is 1.63 times more volatile than United Utilities Group. It trades about 0.03 of its potential returns per unit of risk. United Utilities Group is currently generating about 0.01 per unit of risk. If you would invest 90.00 in CHRYSALIS INVESTMENTS LTD on October 29, 2024 and sell it today you would earn a total of 21.00 from holding CHRYSALIS INVESTMENTS LTD or generate 23.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
CHRYSALIS INVESTMENTS LTD vs. United Utilities Group
Performance |
| Timeline |
| CHRYSALIS INVESTMENTS LTD |
| United Utilities |
CHRYSALIS INVESTMENTS and United Utilities Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CHRYSALIS INVESTMENTS and United Utilities
The main advantage of trading using opposite CHRYSALIS INVESTMENTS and United Utilities positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CHRYSALIS INVESTMENTS position performs unexpectedly, United Utilities 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 United Utilities will offset losses from the drop in United Utilities' long position.| CHRYSALIS INVESTMENTS vs. HK Electric Investments | CHRYSALIS INVESTMENTS vs. SEI INVESTMENTS | CHRYSALIS INVESTMENTS vs. MAGNUM MINING EXP | CHRYSALIS INVESTMENTS vs. Guangdong Investment Limited |
| United Utilities vs. SALESFORCE INC CDR | United Utilities vs. ONWARD MEDICAL BV | United Utilities vs. Salesforce | United Utilities vs. CREO MEDICAL GRP |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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