Correlation Between Wider Planet and Camus Engineering
Can any of the company-specific risk be diversified away by investing in both Wider Planet and Camus Engineering 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 Wider Planet and Camus Engineering into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Wider Planet and Camus Engineering Construction, you can compare the effects of market volatilities on Wider Planet and Camus Engineering 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 Wider Planet with a short position of Camus Engineering. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wider Planet and Camus Engineering.
Diversification Opportunities for Wider Planet and Camus Engineering
-0.58 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Wider and Camus is -0.58. Overlapping area represents the amount of risk that can be diversified away by holding Wider Planet and Camus Engineering Construction in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Camus Engineering and Wider Planet 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 Wider Planet are associated (or correlated) with Camus Engineering. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Camus Engineering has no effect on the direction of Wider Planet i.e., Wider Planet and Camus Engineering go up and down completely randomly.
Pair Corralation between Wider Planet and Camus Engineering
Assuming the 90 days trading horizon Wider Planet is expected to under-perform the Camus Engineering. In addition to that, Wider Planet is 1.12 times more volatile than Camus Engineering Construction. It trades about -0.25 of its total potential returns per unit of risk. Camus Engineering Construction is currently generating about 0.08 per unit of volatility. If you would invest 129,700 in Camus Engineering Construction on October 24, 2024 and sell it today you would earn a total of 8,700 from holding Camus Engineering Construction or generate 6.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Wider Planet vs. Camus Engineering Construction
Performance |
| Timeline |
| Wider Planet |
| Camus Engineering |
Wider Planet and Camus Engineering Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Wider Planet and Camus Engineering
The main advantage of trading using opposite Wider Planet and Camus Engineering positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wider Planet position performs unexpectedly, Camus Engineering 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 Camus Engineering will offset losses from the drop in Camus Engineering's long position.| Wider Planet vs. Namhwa Industrial Co | Wider Planet vs. Bosung Power Technology | Wider Planet vs. Daejung Chemicals Metals | Wider Planet vs. Puloon Technology |
| Camus Engineering vs. Pyung Hwa Industrial | Camus Engineering vs. Asiana Airlines | Camus Engineering vs. Eagon Industrial Co | Camus Engineering vs. Namhwa Industrial Co |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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