Correlation Between CBIZ and Aqua Metals
Can any of the company-specific risk be diversified away by investing in both CBIZ and Aqua Metals 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 CBIZ and Aqua Metals into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CBIZ Inc and Aqua Metals, you can compare the effects of market volatilities on CBIZ and Aqua Metals 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 CBIZ with a short position of Aqua Metals. Check out your portfolio center. Please also check ongoing floating volatility patterns of CBIZ and Aqua Metals.
Diversification Opportunities for CBIZ and Aqua Metals
-0.63 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between CBIZ and Aqua is -0.63. Overlapping area represents the amount of risk that can be diversified away by holding CBIZ Inc and Aqua Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aqua Metals and CBIZ 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 CBIZ Inc are associated (or correlated) with Aqua Metals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aqua Metals has no effect on the direction of CBIZ i.e., CBIZ and Aqua Metals go up and down completely randomly.
Pair Corralation between CBIZ and Aqua Metals
Considering the 90-day investment horizon CBIZ Inc is expected to generate 0.35 times more return on investment than Aqua Metals. However, CBIZ Inc is 2.85 times less risky than Aqua Metals. It trades about 0.04 of its potential returns per unit of risk. Aqua Metals is currently generating about -0.1 per unit of risk. If you would invest 7,606 in CBIZ Inc on August 31, 2024 and sell it today you would earn a total of 652.00 from holding CBIZ Inc or generate 8.57% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
CBIZ Inc vs. Aqua Metals
Performance |
| Timeline |
| CBIZ Inc |
| Aqua Metals |
CBIZ and Aqua Metals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CBIZ and Aqua Metals
The main advantage of trading using opposite CBIZ and Aqua Metals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CBIZ position performs unexpectedly, Aqua Metals 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 Aqua Metals will offset losses from the drop in Aqua Metals' long position.The idea behind CBIZ Inc and Aqua Metals 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.| Aqua Metals vs. LanzaTech Global | Aqua Metals vs. Waste Management | Aqua Metals vs. Clean Harbors | Aqua Metals vs. Casella Waste Systems |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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