Correlation Between Continental Beverage and Four Leaf
Can any of the company-specific risk be diversified away by investing in both Continental Beverage and Four Leaf 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 Continental Beverage and Four Leaf into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Continental Beverage Brands and Four Leaf Acquisition, you can compare the effects of market volatilities on Continental Beverage and Four Leaf 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 Continental Beverage with a short position of Four Leaf. Check out your portfolio center. Please also check ongoing floating volatility patterns of Continental Beverage and Four Leaf.
Diversification Opportunities for Continental Beverage and Four Leaf
-0.29 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Continental and Four is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding Continental Beverage Brands and Four Leaf Acquisition in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Four Leaf Acquisition and Continental Beverage 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 Continental Beverage Brands are associated (or correlated) with Four Leaf. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Four Leaf Acquisition has no effect on the direction of Continental Beverage i.e., Continental Beverage and Four Leaf go up and down completely randomly.
Pair Corralation between Continental Beverage and Four Leaf
Given the investment horizon of 90 days Continental Beverage Brands is expected to generate 572.72 times more return on investment than Four Leaf. However, Continental Beverage is 572.72 times more volatile than Four Leaf Acquisition. It trades about 0.2 of its potential returns per unit of risk. Four Leaf Acquisition is currently generating about 0.03 per unit of risk. If you would invest 20.00 in Continental Beverage Brands on September 2, 2024 and sell it today you would earn a total of 55.00 from holding Continental Beverage Brands or generate 275.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Continental Beverage Brands vs. Four Leaf Acquisition
Performance |
| Timeline |
| Continental Beverage |
| Four Leaf Acquisition |
Continental Beverage and Four Leaf Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Continental Beverage and Four Leaf
The main advantage of trading using opposite Continental Beverage and Four Leaf positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Continental Beverage position performs unexpectedly, Four Leaf 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 Four Leaf will offset losses from the drop in Four Leaf's long position.| Continental Beverage vs. American Leisure Holdings | Continental Beverage vs. Supurva Healthcare Group | Continental Beverage vs. China Health Management | Continental Beverage vs. Embrace Change Acquisition |
| Four Leaf vs. Valens | Four Leaf vs. Simon Property Group | Four Leaf vs. LB Foster | Four Leaf vs. FormFactor |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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