Correlation Between CCL Industries and Financial
Can any of the company-specific risk be diversified away by investing in both CCL Industries and Financial 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 CCL Industries and Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CCL Industries and Financial 15 Split, you can compare the effects of market volatilities on CCL Industries and Financial 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 CCL Industries with a short position of Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of CCL Industries and Financial.
Diversification Opportunities for CCL Industries and Financial
-0.78 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between CCL and Financial is -0.78. Overlapping area represents the amount of risk that can be diversified away by holding CCL Industries and Financial 15 Split in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Financial 15 Split and CCL Industries 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 CCL Industries are associated (or correlated) with Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Financial 15 Split has no effect on the direction of CCL Industries i.e., CCL Industries and Financial go up and down completely randomly.
Pair Corralation between CCL Industries and Financial
Assuming the 90 days trading horizon CCL Industries is expected to under-perform the Financial. In addition to that, CCL Industries is 2.86 times more volatile than Financial 15 Split. It trades about -0.08 of its total potential returns per unit of risk. Financial 15 Split is currently generating about 0.39 per unit of volatility. If you would invest 1,075 in Financial 15 Split on November 18, 2024 and sell it today you would earn a total of 37.00 from holding Financial 15 Split or generate 3.44% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
CCL Industries vs. Financial 15 Split
Performance |
| Timeline |
| CCL Industries |
| Financial 15 Split |
CCL Industries and Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CCL Industries and Financial
The main advantage of trading using opposite CCL Industries and Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CCL Industries position performs unexpectedly, Financial 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 Financial will offset losses from the drop in Financial's long position.| CCL Industries vs. Stella Jones | CCL Industries vs. Gildan Activewear | CCL Industries vs. Toromont Industries | CCL Industries vs. Waste Connections |
| Financial vs. North American Financial | Financial vs. Dividend 15 Split | Financial vs. Dividend Growth Split | Financial vs. Dividend 15 Split |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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