Correlation Between Chiba Bank and Formycon
Can any of the company-specific risk be diversified away by investing in both Chiba Bank and Formycon 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 Formycon into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Chiba Bank and Formycon AG, you can compare the effects of market volatilities on Chiba Bank and Formycon 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 Formycon. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chiba Bank and Formycon.
Diversification Opportunities for Chiba Bank and Formycon
0.25 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Chiba and Formycon is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding Chiba Bank and Formycon AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Formycon AG 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 Formycon. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Formycon AG has no effect on the direction of Chiba Bank i.e., Chiba Bank and Formycon go up and down completely randomly.
Pair Corralation between Chiba Bank and Formycon
Assuming the 90 days horizon Chiba Bank is expected to generate 1.14 times more return on investment than Formycon. However, Chiba Bank is 1.14 times more volatile than Formycon AG. It trades about 0.06 of its potential returns per unit of risk. Formycon AG is currently generating about -0.01 per unit of risk. If you would invest 408.00 in Chiba Bank on November 1, 2024 and sell it today you would earn a total of 387.00 from holding Chiba Bank or generate 94.85% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 99.79% |
| Values | Daily Returns |
Chiba Bank vs. Formycon AG
Performance |
| Timeline |
| Chiba Bank |
| Formycon AG |
Chiba Bank and Formycon Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chiba Bank and Formycon
The main advantage of trading using opposite Chiba Bank and Formycon positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chiba Bank position performs unexpectedly, Formycon 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 Formycon will offset losses from the drop in Formycon's long position.| Chiba Bank vs. Coffee Holding Co | Chiba Bank vs. Elmos Semiconductor SE | Chiba Bank vs. Zijin Mining Group | Chiba Bank vs. Nordic Semiconductor ASA |
| Formycon vs. Verizon Communications | Formycon vs. Chiba Bank | Formycon vs. MAVEN WIRELESS SWEDEN | Formycon vs. PNC Financial Services |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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