Correlation Between Cal-Bay Intl and Armada Mercantile
Can any of the company-specific risk be diversified away by investing in both Cal-Bay Intl and Armada Mercantile 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 Cal-Bay Intl and Armada Mercantile into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cal Bay Intl and Armada Mercantile, you can compare the effects of market volatilities on Cal-Bay Intl and Armada Mercantile 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 Cal-Bay Intl with a short position of Armada Mercantile. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cal-Bay Intl and Armada Mercantile.
Diversification Opportunities for Cal-Bay Intl and Armada Mercantile
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Cal-Bay and Armada is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Cal Bay Intl and Armada Mercantile in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Armada Mercantile and Cal-Bay Intl 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 Cal Bay Intl are associated (or correlated) with Armada Mercantile. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Armada Mercantile has no effect on the direction of Cal-Bay Intl i.e., Cal-Bay Intl and Armada Mercantile go up and down completely randomly.
Pair Corralation between Cal-Bay Intl and Armada Mercantile
Given the investment horizon of 90 days Cal Bay Intl is expected to generate 7.79 times more return on investment than Armada Mercantile. However, Cal-Bay Intl is 7.79 times more volatile than Armada Mercantile. It trades about 0.1 of its potential returns per unit of risk. Armada Mercantile is currently generating about 0.03 per unit of risk. If you would invest 0.03 in Cal Bay Intl on August 26, 2024 and sell it today you would lose (0.02) from holding Cal Bay Intl or give up 66.67% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cal Bay Intl vs. Armada Mercantile
Performance |
| Timeline |
| Cal Bay Intl |
| Armada Mercantile |
Cal-Bay Intl and Armada Mercantile Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cal-Bay Intl and Armada Mercantile
The main advantage of trading using opposite Cal-Bay Intl and Armada Mercantile positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cal-Bay Intl position performs unexpectedly, Armada Mercantile 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 Armada Mercantile will offset losses from the drop in Armada Mercantile's long position.| Cal-Bay Intl vs. Halitron | Cal-Bay Intl vs. First BITCoin Capital | Cal-Bay Intl vs. Blackstar Enterprise Group | Cal-Bay Intl vs. Armada Mercantile |
| Armada Mercantile vs. SPENN Technology AS | Armada Mercantile vs. Arcane Crypto AB | Armada Mercantile vs. OFX Group Ltd | Armada Mercantile vs. Blockmate Ventures |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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