Correlation Between Coloray International and Cytogen
Can any of the company-specific risk be diversified away by investing in both Coloray International and Cytogen 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 Cytogen 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 Cytogen, you can compare the effects of market volatilities on Coloray International and Cytogen 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 Cytogen. Check out your portfolio center. Please also check ongoing floating volatility patterns of Coloray International and Cytogen.
Diversification Opportunities for Coloray International and Cytogen
0.08 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Coloray and Cytogen is 0.08. Overlapping area represents the amount of risk that can be diversified away by holding Coloray International Investme and Cytogen in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cytogen 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 Cytogen. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cytogen has no effect on the direction of Coloray International i.e., Coloray International and Cytogen go up and down completely randomly.
Pair Corralation between Coloray International and Cytogen
Assuming the 90 days trading horizon Coloray International Investment is expected to generate 0.7 times more return on investment than Cytogen. However, Coloray International Investment is 1.43 times less risky than Cytogen. It trades about -0.03 of its potential returns per unit of risk. Cytogen is currently generating about -0.05 per unit of risk. If you would invest 127,489 in Coloray International Investment on October 29, 2024 and sell it today you would lose (54,589) from holding Coloray International Investment or give up 42.82% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Coloray International Investme vs. Cytogen
Performance |
| Timeline |
| Coloray International |
| Cytogen |
Coloray International and Cytogen Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Coloray International and Cytogen
The main advantage of trading using opposite Coloray International and Cytogen positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Coloray International position performs unexpectedly, Cytogen 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 Cytogen will offset losses from the drop in Cytogen's long position.| Coloray International vs. Eagon Industrial Co | Coloray International vs. Lee Ku Industrial | Coloray International vs. Shinhan Inverse Silver | Coloray International vs. DB Financial Investment |
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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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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