Correlation Between Coloray International and Stic Investments
Can any of the company-specific risk be diversified away by investing in both Coloray International and Stic Investments 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 Coloray International and Stic Investments into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Coloray International Investment and Stic Investments, you can compare the effects of market volatilities on Coloray International and Stic Investments 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 Coloray International with a short position of Stic Investments. Check out your portfolio center. Please also check ongoing floating volatility patterns of Coloray International and Stic Investments.
Diversification Opportunities for Coloray International and Stic Investments
-0.24 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Coloray and Stic is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding Coloray International Investme and Stic Investments in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Stic Investments and Coloray International 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 Coloray International Investment are associated (or correlated) with Stic Investments. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Stic Investments has no effect on the direction of Coloray International i.e., Coloray International and Stic Investments go up and down completely randomly.
Pair Corralation between Coloray International and Stic Investments
Assuming the 90 days trading horizon Coloray International Investment is expected to generate 2.04 times more return on investment than Stic Investments. However, Coloray International is 2.04 times more volatile than Stic Investments. It trades about 0.37 of its potential returns per unit of risk. Stic Investments is currently generating about -0.27 per unit of risk. If you would invest 57,800 in Coloray International Investment on October 23, 2024 and sell it today you would earn a total of 11,200 from holding Coloray International Investment or generate 19.38% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Coloray International Investme vs. Stic Investments
Performance |
| Timeline |
| Coloray International |
| Stic Investments |
Coloray International and Stic Investments Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Coloray International and Stic Investments
The main advantage of trading using opposite Coloray International and Stic Investments positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Coloray International position performs unexpectedly, Stic Investments 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 Stic Investments will offset losses from the drop in Stic Investments' long position.| Coloray International vs. Orbitech Co | Coloray International vs. SAMG Entertainment Co | Coloray International vs. Hwangkum Steel Technology | Coloray International vs. YG Entertainment |
| Stic Investments vs. InfoBank | Stic Investments vs. Korean Reinsurance Co | Stic Investments vs. Industrial Bank | Stic Investments vs. KTB Investment Securities |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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