Correlation Between Castro and Terminal X
Can any of the company-specific risk be diversified away by investing in both Castro and Terminal X 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 Castro and Terminal X into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Castro and Terminal X Online, you can compare the effects of market volatilities on Castro and Terminal X 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 Castro with a short position of Terminal X. Check out your portfolio center. Please also check ongoing floating volatility patterns of Castro and Terminal X.
Diversification Opportunities for Castro and Terminal X
0.79 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Castro and Terminal is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Castro and Terminal X Online in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Terminal X Online and Castro 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 Castro are associated (or correlated) with Terminal X. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Terminal X Online has no effect on the direction of Castro i.e., Castro and Terminal X go up and down completely randomly.
Pair Corralation between Castro and Terminal X
Assuming the 90 days trading horizon Castro is expected to generate 1.57 times more return on investment than Terminal X. However, Castro is 1.57 times more volatile than Terminal X Online. It trades about 0.2 of its potential returns per unit of risk. Terminal X Online is currently generating about 0.08 per unit of risk. If you would invest 1,012,795 in Castro on November 3, 2024 and sell it today you would earn a total of 74,205 from holding Castro or generate 7.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Castro vs. Terminal X Online
Performance |
| Timeline |
| Castro |
| Terminal X Online |
Castro and Terminal X Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Castro and Terminal X
The main advantage of trading using opposite Castro and Terminal X positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Castro position performs unexpectedly, Terminal X 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 Terminal X will offset losses from the drop in Terminal X's long position.| Castro vs. Fox Wizel | Castro vs. Golf Co Group | Castro vs. Bezeq Israeli Telecommunication | Castro vs. Azrieli Group |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
Other Complementary Tools
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine | |
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk | |
| Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format | |
| Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments | |
| Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity |