Correlation Between Popular Capital and CHS
Can any of the company-specific risk be diversified away by investing in both Popular Capital and CHS 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 Popular Capital and CHS into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Popular Capital Trust and CHS Inc CM, you can compare the effects of market volatilities on Popular Capital and CHS 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 Popular Capital with a short position of CHS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Popular Capital and CHS.
Diversification Opportunities for Popular Capital and CHS
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Popular and CHS is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Popular Capital Trust and CHS Inc CM in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CHS Inc CM and Popular Capital 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 Popular Capital Trust are associated (or correlated) with CHS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CHS Inc CM has no effect on the direction of Popular Capital i.e., Popular Capital and CHS go up and down completely randomly.
Pair Corralation between Popular Capital and CHS
Assuming the 90 days horizon Popular Capital Trust is expected to generate 1.46 times more return on investment than CHS. However, Popular Capital is 1.46 times more volatile than CHS Inc CM. It trades about -0.02 of its potential returns per unit of risk. CHS Inc CM is currently generating about -0.08 per unit of risk. If you would invest 2,584 in Popular Capital Trust on August 31, 2024 and sell it today you would lose (9.00) from holding Popular Capital Trust or give up 0.35% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Popular Capital Trust vs. CHS Inc CM
Performance |
| Timeline |
| Popular Capital Trust |
| CHS Inc CM |
Popular Capital and CHS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Popular Capital and CHS
The main advantage of trading using opposite Popular Capital and CHS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Popular Capital position performs unexpectedly, CHS 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 CHS will offset losses from the drop in CHS's long position.| Popular Capital vs. BFC Capital Trust | Popular Capital vs. Popular | Popular Capital vs. Oxford Lane Capital | Popular Capital vs. Wintrust Financial Corp |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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