Correlation Between Cayenne Entertainment and First Insurance
Can any of the company-specific risk be diversified away by investing in both Cayenne Entertainment and First Insurance 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 Cayenne Entertainment and First Insurance into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cayenne Entertainment Technology and First Insurance Co, you can compare the effects of market volatilities on Cayenne Entertainment and First Insurance 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 Cayenne Entertainment with a short position of First Insurance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cayenne Entertainment and First Insurance.
Diversification Opportunities for Cayenne Entertainment and First Insurance
-0.27 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Cayenne and First is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding Cayenne Entertainment Technolo and First Insurance Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First Insurance and Cayenne Entertainment 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 Cayenne Entertainment Technology are associated (or correlated) with First Insurance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of First Insurance has no effect on the direction of Cayenne Entertainment i.e., Cayenne Entertainment and First Insurance go up and down completely randomly.
Pair Corralation between Cayenne Entertainment and First Insurance
Assuming the 90 days trading horizon Cayenne Entertainment Technology is expected to generate 41.58 times more return on investment than First Insurance. However, Cayenne Entertainment is 41.58 times more volatile than First Insurance Co. It trades about 0.05 of its potential returns per unit of risk. First Insurance Co is currently generating about 0.09 per unit of risk. If you would invest 7,951 in Cayenne Entertainment Technology on September 2, 2024 and sell it today you would lose (4,036) from holding Cayenne Entertainment Technology or give up 50.76% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cayenne Entertainment Technolo vs. First Insurance Co
Performance |
| Timeline |
| Cayenne Entertainment |
| First Insurance |
Cayenne Entertainment and First Insurance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cayenne Entertainment and First Insurance
The main advantage of trading using opposite Cayenne Entertainment and First Insurance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cayenne Entertainment position performs unexpectedly, First Insurance 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 First Insurance will offset losses from the drop in First Insurance's long position.| Cayenne Entertainment vs. Soft World International | Cayenne Entertainment vs. X Legend Entertainment Co | Cayenne Entertainment vs. Userjoy Technology Co | Cayenne Entertainment vs. Fun Yours Technology |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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