Correlation Between CDL INVESTMENT and Powercell Sweden
Can any of the company-specific risk be diversified away by investing in both CDL INVESTMENT and Powercell Sweden 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 CDL INVESTMENT and Powercell Sweden into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CDL INVESTMENT and Powercell Sweden, you can compare the effects of market volatilities on CDL INVESTMENT and Powercell Sweden 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 CDL INVESTMENT with a short position of Powercell Sweden. Check out your portfolio center. Please also check ongoing floating volatility patterns of CDL INVESTMENT and Powercell Sweden.
Diversification Opportunities for CDL INVESTMENT and Powercell Sweden
-0.55 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between CDL and Powercell is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding CDL INVESTMENT and Powercell Sweden in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Powercell Sweden and CDL INVESTMENT 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 CDL INVESTMENT are associated (or correlated) with Powercell Sweden. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Powercell Sweden has no effect on the direction of CDL INVESTMENT i.e., CDL INVESTMENT and Powercell Sweden go up and down completely randomly.
Pair Corralation between CDL INVESTMENT and Powercell Sweden
Assuming the 90 days trading horizon CDL INVESTMENT is expected to generate 0.48 times more return on investment than Powercell Sweden. However, CDL INVESTMENT is 2.07 times less risky than Powercell Sweden. It trades about 0.08 of its potential returns per unit of risk. Powercell Sweden is currently generating about 0.02 per unit of risk. If you would invest 42.00 in CDL INVESTMENT on September 14, 2024 and sell it today you would earn a total of 1.00 from holding CDL INVESTMENT or generate 2.38% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
CDL INVESTMENT vs. Powercell Sweden
Performance |
| Timeline |
| CDL INVESTMENT |
| Powercell Sweden |
CDL INVESTMENT and Powercell Sweden Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CDL INVESTMENT and Powercell Sweden
The main advantage of trading using opposite CDL INVESTMENT and Powercell Sweden positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CDL INVESTMENT position performs unexpectedly, Powercell Sweden 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 Powercell Sweden will offset losses from the drop in Powercell Sweden's long position.| CDL INVESTMENT vs. Apple Inc | CDL INVESTMENT vs. Apple Inc | CDL INVESTMENT vs. Apple Inc | CDL INVESTMENT vs. Apple Inc |
| Powercell Sweden vs. CDL INVESTMENT | Powercell Sweden vs. AGNC INVESTMENT | Powercell Sweden vs. QINGCI GAMES INC | Powercell Sweden vs. VARIOUS EATERIES LS |
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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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