Correlation Between Chiba Bank and AptarGroup
Can any of the company-specific risk be diversified away by investing in both Chiba Bank and AptarGroup 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 Chiba Bank and AptarGroup into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Chiba Bank and AptarGroup, you can compare the effects of market volatilities on Chiba Bank and AptarGroup 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 Chiba Bank with a short position of AptarGroup. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chiba Bank and AptarGroup.
Diversification Opportunities for Chiba Bank and AptarGroup
0.52 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Chiba and AptarGroup is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding Chiba Bank and AptarGroup in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AptarGroup and Chiba Bank 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 Chiba Bank are associated (or correlated) with AptarGroup. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AptarGroup has no effect on the direction of Chiba Bank i.e., Chiba Bank and AptarGroup go up and down completely randomly.
Pair Corralation between Chiba Bank and AptarGroup
Assuming the 90 days horizon Chiba Bank is expected to generate 1.41 times less return on investment than AptarGroup. In addition to that, Chiba Bank is 1.95 times more volatile than AptarGroup. It trades about 0.05 of its total potential returns per unit of risk. AptarGroup is currently generating about 0.13 per unit of volatility. If you would invest 11,324 in AptarGroup on September 14, 2024 and sell it today you would earn a total of 4,996 from holding AptarGroup or generate 44.12% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 99.6% |
| Values | Daily Returns |
Chiba Bank vs. AptarGroup
Performance |
| Timeline |
| Chiba Bank |
| AptarGroup |
Chiba Bank and AptarGroup Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chiba Bank and AptarGroup
The main advantage of trading using opposite Chiba Bank and AptarGroup positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chiba Bank position performs unexpectedly, AptarGroup 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 AptarGroup will offset losses from the drop in AptarGroup's long position.The idea behind Chiba Bank and AptarGroup pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| AptarGroup vs. YOOMA WELLNESS INC | AptarGroup vs. Sabra Health Care | AptarGroup vs. Bausch Health Companies | AptarGroup vs. MagnaChip Semiconductor Corp |
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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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