Correlation Between CA Sales and Sebata Holdings
Can any of the company-specific risk be diversified away by investing in both CA Sales and Sebata Holdings 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 CA Sales and Sebata Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CA Sales Holdings and Sebata Holdings, you can compare the effects of market volatilities on CA Sales and Sebata Holdings 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 CA Sales with a short position of Sebata Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of CA Sales and Sebata Holdings.
Diversification Opportunities for CA Sales and Sebata Holdings
-0.65 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between CAA and Sebata is -0.65. Overlapping area represents the amount of risk that can be diversified away by holding CA Sales Holdings and Sebata Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sebata Holdings and CA Sales 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 CA Sales Holdings are associated (or correlated) with Sebata Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sebata Holdings has no effect on the direction of CA Sales i.e., CA Sales and Sebata Holdings go up and down completely randomly.
Pair Corralation between CA Sales and Sebata Holdings
Assuming the 90 days trading horizon CA Sales is expected to generate 2.34 times less return on investment than Sebata Holdings. But when comparing it to its historical volatility, CA Sales Holdings is 2.01 times less risky than Sebata Holdings. It trades about 0.02 of its potential returns per unit of risk. Sebata Holdings is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 9,500 in Sebata Holdings on August 31, 2024 and sell it today you would earn a total of 0.00 from holding Sebata Holdings or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
CA Sales Holdings vs. Sebata Holdings
Performance |
| Timeline |
| CA Sales Holdings |
| Sebata Holdings |
CA Sales and Sebata Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CA Sales and Sebata Holdings
The main advantage of trading using opposite CA Sales and Sebata Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CA Sales position performs unexpectedly, Sebata Holdings 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 Sebata Holdings will offset losses from the drop in Sebata Holdings' long position.| CA Sales vs. Kap Industrial Holdings | CA Sales vs. City Lodge Hotels | CA Sales vs. RCL Foods | CA Sales vs. E Media Holdings |
| Sebata Holdings vs. CA Sales Holdings | Sebata Holdings vs. Trematon Capital Investments | Sebata Holdings vs. Afine Investments | Sebata Holdings vs. Deneb Investments |
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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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