Correlation Between Bowlin Travel and Ceconomy
Can any of the company-specific risk be diversified away by investing in both Bowlin Travel and Ceconomy 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 Bowlin Travel and Ceconomy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bowlin Travel Centers and Ceconomy AG ADR, you can compare the effects of market volatilities on Bowlin Travel and Ceconomy 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 Bowlin Travel with a short position of Ceconomy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bowlin Travel and Ceconomy.
Diversification Opportunities for Bowlin Travel and Ceconomy
0.15 | Correlation Coefficient |
Average diversification
The 3 months correlation between Bowlin and Ceconomy is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding Bowlin Travel Centers and Ceconomy AG ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ceconomy AG ADR and Bowlin Travel 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 Bowlin Travel Centers are associated (or correlated) with Ceconomy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ceconomy AG ADR has no effect on the direction of Bowlin Travel i.e., Bowlin Travel and Ceconomy go up and down completely randomly.
Pair Corralation between Bowlin Travel and Ceconomy
Given the investment horizon of 90 days Bowlin Travel is expected to generate 119.01 times less return on investment than Ceconomy. But when comparing it to its historical volatility, Bowlin Travel Centers is 2.98 times less risky than Ceconomy. It trades about 0.01 of its potential returns per unit of risk. Ceconomy AG ADR is currently generating about 0.24 of returns per unit of risk over similar time horizon. If you would invest 49.00 in Ceconomy AG ADR on November 3, 2024 and sell it today you would earn a total of 9.00 from holding Ceconomy AG ADR or generate 18.37% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 95.24% |
| Values | Daily Returns |
Bowlin Travel Centers vs. Ceconomy AG ADR
Performance |
| Timeline |
| Bowlin Travel Centers |
| Ceconomy AG ADR |
Bowlin Travel and Ceconomy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bowlin Travel and Ceconomy
The main advantage of trading using opposite Bowlin Travel and Ceconomy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bowlin Travel position performs unexpectedly, Ceconomy 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 Ceconomy will offset losses from the drop in Ceconomy's long position.| Bowlin Travel vs. Paysafe | Bowlin Travel vs. Asure Software | Bowlin Travel vs. Parker Hannifin | Bowlin Travel vs. Everus Construction Group |
| Ceconomy vs. Green River Gold | Ceconomy vs. Dixons Carphone plc | Ceconomy vs. Tandy Leather Factory | Ceconomy vs. Card Factory plc |
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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