Correlation Between Carson Cumberbatch and Union Chemicals
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By analyzing existing cross correlation between Carson Cumberbatch PLC and Union Chemicals Lanka, you can compare the effects of market volatilities on Carson Cumberbatch and Union Chemicals 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 Carson Cumberbatch with a short position of Union Chemicals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Carson Cumberbatch and Union Chemicals.
Diversification Opportunities for Carson Cumberbatch and Union Chemicals
0.94 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Carson and Union is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding Carson Cumberbatch PLC and Union Chemicals Lanka in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Union Chemicals Lanka and Carson Cumberbatch 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 Carson Cumberbatch PLC are associated (or correlated) with Union Chemicals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Union Chemicals Lanka has no effect on the direction of Carson Cumberbatch i.e., Carson Cumberbatch and Union Chemicals go up and down completely randomly.
Pair Corralation between Carson Cumberbatch and Union Chemicals
Assuming the 90 days trading horizon Carson Cumberbatch PLC is expected to generate 3.94 times more return on investment than Union Chemicals. However, Carson Cumberbatch is 3.94 times more volatile than Union Chemicals Lanka. It trades about 0.09 of its potential returns per unit of risk. Union Chemicals Lanka is currently generating about 0.13 per unit of risk. If you would invest 42,450 in Carson Cumberbatch PLC on November 28, 2024 and sell it today you would earn a total of 2,450 from holding Carson Cumberbatch PLC or generate 5.77% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Carson Cumberbatch PLC vs. Union Chemicals Lanka
Performance |
| Timeline |
| Carson Cumberbatch PLC |
| Union Chemicals Lanka |
Carson Cumberbatch and Union Chemicals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Carson Cumberbatch and Union Chemicals
The main advantage of trading using opposite Carson Cumberbatch and Union Chemicals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Carson Cumberbatch position performs unexpectedly, Union Chemicals 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 Union Chemicals will offset losses from the drop in Union Chemicals' long position.| Carson Cumberbatch vs. Union Bank | Carson Cumberbatch vs. Merchant Bank of | Carson Cumberbatch vs. Lion Brewery Ceylon | Carson Cumberbatch vs. RENUKA FOODS PLC |
| Union Chemicals vs. Convenience Foods PLC | Union Chemicals vs. Renuka Agri Foods | Union Chemicals vs. Ceylon Hotels | Union Chemicals vs. Aitken Spence Hotel |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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