Correlation Between Cardiff Property and M Winkworth
Can any of the company-specific risk be diversified away by investing in both Cardiff Property and M Winkworth 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 Cardiff Property and M Winkworth into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cardiff Property PLC and M Winkworth PLC, you can compare the effects of market volatilities on Cardiff Property and M Winkworth 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 Cardiff Property with a short position of M Winkworth. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cardiff Property and M Winkworth.
Diversification Opportunities for Cardiff Property and M Winkworth
0.57 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Cardiff and WINK is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding Cardiff Property PLC and M Winkworth PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on M Winkworth PLC and Cardiff Property 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 Cardiff Property PLC are associated (or correlated) with M Winkworth. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of M Winkworth PLC has no effect on the direction of Cardiff Property i.e., Cardiff Property and M Winkworth go up and down completely randomly.
Pair Corralation between Cardiff Property and M Winkworth
Assuming the 90 days trading horizon Cardiff Property is expected to generate 3.38 times less return on investment than M Winkworth. But when comparing it to its historical volatility, Cardiff Property PLC is 3.18 times less risky than M Winkworth. It trades about 0.04 of its potential returns per unit of risk. M Winkworth PLC is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 14,779 in M Winkworth PLC on November 2, 2024 and sell it today you would earn a total of 5,221 from holding M Winkworth PLC or generate 35.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cardiff Property PLC vs. M Winkworth PLC
Performance |
| Timeline |
| Cardiff Property PLC |
| M Winkworth PLC |
Cardiff Property and M Winkworth Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cardiff Property and M Winkworth
The main advantage of trading using opposite Cardiff Property and M Winkworth positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cardiff Property position performs unexpectedly, M Winkworth 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 M Winkworth will offset losses from the drop in M Winkworth's long position.| Cardiff Property vs. Zurich Insurance Group | Cardiff Property vs. GoldMining | Cardiff Property vs. GreenX Metals | Cardiff Property vs. China Pacific Insurance |
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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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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