Correlation Between Black Cat and Home Consortium
Can any of the company-specific risk be diversified away by investing in both Black Cat and Home Consortium 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 Black Cat and Home Consortium into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Black Cat Syndicate and Home Consortium, you can compare the effects of market volatilities on Black Cat and Home Consortium 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 Black Cat with a short position of Home Consortium. Check out your portfolio center. Please also check ongoing floating volatility patterns of Black Cat and Home Consortium.
Diversification Opportunities for Black Cat and Home Consortium
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Black and Home is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Black Cat Syndicate and Home Consortium in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Home Consortium and Black Cat 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 Black Cat Syndicate are associated (or correlated) with Home Consortium. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Home Consortium has no effect on the direction of Black Cat i.e., Black Cat and Home Consortium go up and down completely randomly.
Pair Corralation between Black Cat and Home Consortium
Assuming the 90 days trading horizon Black Cat Syndicate is expected to generate 2.43 times more return on investment than Home Consortium. However, Black Cat is 2.43 times more volatile than Home Consortium. It trades about 0.12 of its potential returns per unit of risk. Home Consortium is currently generating about 0.19 per unit of risk. If you would invest 25.00 in Black Cat Syndicate on August 29, 2024 and sell it today you would earn a total of 44.00 from holding Black Cat Syndicate or generate 176.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Black Cat Syndicate vs. Home Consortium
Performance |
| Timeline |
| Black Cat Syndicate |
| Home Consortium |
Black Cat and Home Consortium Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Black Cat and Home Consortium
The main advantage of trading using opposite Black Cat and Home Consortium positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Black Cat position performs unexpectedly, Home Consortium 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 Home Consortium will offset losses from the drop in Home Consortium's long position.| Black Cat vs. Flagship Investments | Black Cat vs. Treasury Wine Estates | Black Cat vs. Hotel Property Investments | Black Cat vs. Platinum Asia Investments |
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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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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