Correlation Between Azure Holding and Continental Beverage
Can any of the company-specific risk be diversified away by investing in both Azure Holding and Continental Beverage 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 Azure Holding and Continental Beverage into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Azure Holding Group and Continental Beverage Brands, you can compare the effects of market volatilities on Azure Holding and Continental Beverage 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 Azure Holding with a short position of Continental Beverage. Check out your portfolio center. Please also check ongoing floating volatility patterns of Azure Holding and Continental Beverage.
Diversification Opportunities for Azure Holding and Continental Beverage
0.29 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Azure and Continental is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding Azure Holding Group and Continental Beverage Brands in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Continental Beverage and Azure Holding 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 Azure Holding Group are associated (or correlated) with Continental Beverage. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Continental Beverage has no effect on the direction of Azure Holding i.e., Azure Holding and Continental Beverage go up and down completely randomly.
Pair Corralation between Azure Holding and Continental Beverage
Given the investment horizon of 90 days Azure Holding is expected to generate 3.14 times less return on investment than Continental Beverage. But when comparing it to its historical volatility, Azure Holding Group is 2.88 times less risky than Continental Beverage. It trades about 0.18 of its potential returns per unit of risk. Continental Beverage Brands is currently generating about 0.2 of returns per unit of risk over similar time horizon. If you would invest 20.00 in Continental Beverage Brands on August 30, 2024 and sell it today you would earn a total of 55.00 from holding Continental Beverage Brands or generate 275.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Azure Holding Group vs. Continental Beverage Brands
Performance |
| Timeline |
| Azure Holding Group |
| Continental Beverage |
Azure Holding and Continental Beverage Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Azure Holding and Continental Beverage
The main advantage of trading using opposite Azure Holding and Continental Beverage positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Azure Holding position performs unexpectedly, Continental Beverage 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 Continental Beverage will offset losses from the drop in Continental Beverage's long position.| Azure Holding vs. Alsea SAB de | Azure Holding vs. Marstons PLC | Azure Holding vs. Bagger Daves Burger | Azure Holding vs. Marstons PLC |
| Continental Beverage vs. Green Planet Bio | Continental Beverage vs. Azure Holding Group | Continental Beverage vs. Four Leaf Acquisition | Continental Beverage vs. Opus Magnum Ameris |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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