Correlation Between CAUDAN DEVELOPMENT and LOTTOTECH
Can any of the company-specific risk be diversified away by investing in both CAUDAN DEVELOPMENT and LOTTOTECH 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 CAUDAN DEVELOPMENT and LOTTOTECH into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CAUDAN DEVELOPMENT LTD and LOTTOTECH LTD, you can compare the effects of market volatilities on CAUDAN DEVELOPMENT and LOTTOTECH 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 CAUDAN DEVELOPMENT with a short position of LOTTOTECH. Check out your portfolio center. Please also check ongoing floating volatility patterns of CAUDAN DEVELOPMENT and LOTTOTECH.
Diversification Opportunities for CAUDAN DEVELOPMENT and LOTTOTECH
-0.08 | Correlation Coefficient |
Good diversification
The 3 months correlation between CAUDAN and LOTTOTECH is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding CAUDAN DEVELOPMENT LTD and LOTTOTECH LTD in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LOTTOTECH LTD and CAUDAN DEVELOPMENT 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 CAUDAN DEVELOPMENT LTD are associated (or correlated) with LOTTOTECH. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LOTTOTECH LTD has no effect on the direction of CAUDAN DEVELOPMENT i.e., CAUDAN DEVELOPMENT and LOTTOTECH go up and down completely randomly.
Pair Corralation between CAUDAN DEVELOPMENT and LOTTOTECH
Assuming the 90 days trading horizon CAUDAN DEVELOPMENT LTD is expected to generate 2.09 times more return on investment than LOTTOTECH. However, CAUDAN DEVELOPMENT is 2.09 times more volatile than LOTTOTECH LTD. It trades about 0.01 of its potential returns per unit of risk. LOTTOTECH LTD is currently generating about -0.04 per unit of risk. If you would invest 68.00 in CAUDAN DEVELOPMENT LTD on September 2, 2024 and sell it today you would lose (11.00) from holding CAUDAN DEVELOPMENT LTD or give up 16.18% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 90.2% |
| Values | Daily Returns |
CAUDAN DEVELOPMENT LTD vs. LOTTOTECH LTD
Performance |
| Timeline |
| CAUDAN DEVELOPMENT LTD |
| LOTTOTECH LTD |
CAUDAN DEVELOPMENT and LOTTOTECH Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CAUDAN DEVELOPMENT and LOTTOTECH
The main advantage of trading using opposite CAUDAN DEVELOPMENT and LOTTOTECH positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CAUDAN DEVELOPMENT position performs unexpectedly, LOTTOTECH 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 LOTTOTECH will offset losses from the drop in LOTTOTECH's long position.| CAUDAN DEVELOPMENT vs. FINCORP INVESTMENT LTD | CAUDAN DEVELOPMENT vs. MCB GROUP LTD | CAUDAN DEVELOPMENT vs. LUX ISLAND RESORTS | CAUDAN DEVELOPMENT vs. NEW MAURITIUS HOTELS |
| LOTTOTECH vs. FINCORP INVESTMENT LTD | LOTTOTECH vs. MCB GROUP LTD | LOTTOTECH vs. CAUDAN DEVELOPMENT LTD | LOTTOTECH vs. LUX ISLAND RESORTS |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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