Correlation Between CA Modas and Adobe
Can any of the company-specific risk be diversified away by investing in both CA Modas and Adobe 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 CA Modas and Adobe into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CA Modas SA and Adobe Inc, you can compare the effects of market volatilities on CA Modas and Adobe 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 CA Modas with a short position of Adobe. Check out your portfolio center. Please also check ongoing floating volatility patterns of CA Modas and Adobe.
Diversification Opportunities for CA Modas and Adobe
Very good diversification
The 3 months correlation between CEAB3 and Adobe is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding CA Modas SA and Adobe Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Adobe Inc and CA Modas 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 CA Modas SA are associated (or correlated) with Adobe. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Adobe Inc has no effect on the direction of CA Modas i.e., CA Modas and Adobe go up and down completely randomly.
Pair Corralation between CA Modas and Adobe
Assuming the 90 days trading horizon CA Modas SA is expected to under-perform the Adobe. In addition to that, CA Modas is 2.45 times more volatile than Adobe Inc. It trades about -0.17 of its total potential returns per unit of risk. Adobe Inc is currently generating about 0.25 per unit of volatility. If you would invest 5,580 in Adobe Inc on September 1, 2024 and sell it today you would earn a total of 630.00 from holding Adobe Inc or generate 11.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
CA Modas SA vs. Adobe Inc
Performance |
| Timeline |
| CA Modas SA |
| Adobe Inc |
CA Modas and Adobe Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CA Modas and Adobe
The main advantage of trading using opposite CA Modas and Adobe positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CA Modas position performs unexpectedly, Adobe 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 Adobe will offset losses from the drop in Adobe's long position.The idea behind CA Modas SA and Adobe Inc 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.| Adobe vs. Multilaser Industrial SA | Adobe vs. Unity Software | Adobe vs. Take Two Interactive Software | Adobe vs. Paycom Software |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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