Correlation Between CEO Group and Ba Ria
Can any of the company-specific risk be diversified away by investing in both CEO Group and Ba Ria 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 CEO Group and Ba Ria into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CEO Group JSC and Ba Ria Thermal, you can compare the effects of market volatilities on CEO Group and Ba Ria 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 CEO Group with a short position of Ba Ria. Check out your portfolio center. Please also check ongoing floating volatility patterns of CEO Group and Ba Ria.
Diversification Opportunities for CEO Group and Ba Ria
Average diversification
The 3 months correlation between CEO and BTP is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding CEO Group JSC and Ba Ria Thermal in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ba Ria Thermal and CEO Group 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 CEO Group JSC are associated (or correlated) with Ba Ria. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ba Ria Thermal has no effect on the direction of CEO Group i.e., CEO Group and Ba Ria go up and down completely randomly.
Pair Corralation between CEO Group and Ba Ria
Assuming the 90 days trading horizon CEO Group JSC is expected to under-perform the Ba Ria. In addition to that, CEO Group is 2.82 times more volatile than Ba Ria Thermal. It trades about -0.01 of its total potential returns per unit of risk. Ba Ria Thermal is currently generating about -0.03 per unit of volatility. If you would invest 1,200,000 in Ba Ria Thermal on November 7, 2024 and sell it today you would lose (5,000) from holding Ba Ria Thermal or give up 0.42% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
CEO Group JSC vs. Ba Ria Thermal
Performance |
| Timeline |
| CEO Group JSC |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Ba Ria Thermal |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
CEO Group and Ba Ria Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CEO Group and Ba Ria
The main advantage of trading using opposite CEO Group and Ba Ria positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CEO Group position performs unexpectedly, Ba Ria 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 Ba Ria will offset losses from the drop in Ba Ria's long position.The idea behind CEO Group JSC and Ba Ria Thermal 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.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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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