Correlation Between CBH and Reaves Utility
Can any of the company-specific risk be diversified away by investing in both CBH and Reaves Utility 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 CBH and Reaves Utility into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CBH and Reaves Utility If, you can compare the effects of market volatilities on CBH and Reaves Utility 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 CBH with a short position of Reaves Utility. Check out your portfolio center. Please also check ongoing floating volatility patterns of CBH and Reaves Utility.
Diversification Opportunities for CBH and Reaves Utility
0.9 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between CBH and Reaves is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding CBH and Reaves Utility If in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Reaves Utility If and CBH 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 CBH are associated (or correlated) with Reaves Utility. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Reaves Utility If has no effect on the direction of CBH i.e., CBH and Reaves Utility go up and down completely randomly.
Pair Corralation between CBH and Reaves Utility
Considering the 90-day investment horizon CBH is expected to generate 4.79 times more return on investment than Reaves Utility. However, CBH is 4.79 times more volatile than Reaves Utility If. It trades about 0.06 of its potential returns per unit of risk. Reaves Utility If is currently generating about 0.07 per unit of risk. If you would invest 772.00 in CBH on August 24, 2024 and sell it today you would earn a total of 985.00 from holding CBH or generate 127.59% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 88.31% |
| Values | Daily Returns |
CBH vs. Reaves Utility If
Performance |
| Timeline |
| CBH |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Strong
| Reaves Utility If |
CBH and Reaves Utility Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CBH and Reaves Utility
The main advantage of trading using opposite CBH and Reaves Utility positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CBH position performs unexpectedly, Reaves Utility 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 Reaves Utility will offset losses from the drop in Reaves Utility's long position.| CBH vs. MFS Investment Grade | CBH vs. Invesco High Income | CBH vs. Eaton Vance National | CBH vs. Nuveen California Select |
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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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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