Correlation Between CCL Industries and Willow Biosciences
Can any of the company-specific risk be diversified away by investing in both CCL Industries and Willow Biosciences 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 Willow Biosciences into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CCL Industries and Willow Biosciences, you can compare the effects of market volatilities on CCL Industries and Willow Biosciences 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 Willow Biosciences. Check out your portfolio center. Please also check ongoing floating volatility patterns of CCL Industries and Willow Biosciences.
Diversification Opportunities for CCL Industries and Willow Biosciences
0.17 | Correlation Coefficient |
Average diversification
The 3 months correlation between CCL and Willow is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding CCL Industries and Willow Biosciences in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Willow Biosciences 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 Willow Biosciences. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Willow Biosciences has no effect on the direction of CCL Industries i.e., CCL Industries and Willow Biosciences go up and down completely randomly.
Pair Corralation between CCL Industries and Willow Biosciences
Assuming the 90 days trading horizon CCL Industries is expected to generate 0.07 times more return on investment than Willow Biosciences. However, CCL Industries is 13.38 times less risky than Willow Biosciences. It trades about -0.02 of its potential returns per unit of risk. Willow Biosciences is currently generating about -0.16 per unit of risk. If you would invest 7,458 in CCL Industries on October 25, 2024 and sell it today you would lose (33.00) from holding CCL Industries or give up 0.44% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
CCL Industries vs. Willow Biosciences
Performance |
| Timeline |
| CCL Industries |
| Willow Biosciences |
CCL Industries and Willow Biosciences Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CCL Industries and Willow Biosciences
The main advantage of trading using opposite CCL Industries and Willow Biosciences positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CCL Industries position performs unexpectedly, Willow Biosciences 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 Willow Biosciences will offset losses from the drop in Willow Biosciences' long position.| CCL Industries vs. Stella Jones | CCL Industries vs. Gildan Activewear | CCL Industries vs. Toromont Industries | CCL Industries vs. Waste Connections |
| Willow Biosciences vs. Medipharm Labs Corp | Willow Biosciences vs. Cardiol Therapeutics Class | Willow Biosciences vs. StageZero Life Sciences |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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