Correlation Between Chiba Bank and Encore Capital
Can any of the company-specific risk be diversified away by investing in both Chiba Bank and Encore Capital 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 Chiba Bank and Encore Capital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Chiba Bank Ltd and Encore Capital Group, you can compare the effects of market volatilities on Chiba Bank and Encore Capital 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 Chiba Bank with a short position of Encore Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chiba Bank and Encore Capital.
Diversification Opportunities for Chiba Bank and Encore Capital
-0.34 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Chiba and Encore is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding Chiba Bank Ltd and Encore Capital Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Encore Capital Group and Chiba Bank 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 Chiba Bank Ltd are associated (or correlated) with Encore Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Encore Capital Group has no effect on the direction of Chiba Bank i.e., Chiba Bank and Encore Capital go up and down completely randomly.
Pair Corralation between Chiba Bank and Encore Capital
If you would invest 4,608 in Encore Capital Group on August 28, 2024 and sell it today you would earn a total of 293.00 from holding Encore Capital Group or generate 6.36% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Chiba Bank Ltd vs. Encore Capital Group
Performance |
| Timeline |
| Chiba Bank |
| Encore Capital Group |
Chiba Bank and Encore Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chiba Bank and Encore Capital
The main advantage of trading using opposite Chiba Bank and Encore Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chiba Bank position performs unexpectedly, Encore Capital 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 Encore Capital will offset losses from the drop in Encore Capital's long position.| Chiba Bank vs. First Hawaiian | Chiba Bank vs. Central Pacific Financial | Chiba Bank vs. Territorial Bancorp | Chiba Bank vs. Comerica |
| Encore Capital vs. Guild Holdings Co | Encore Capital vs. Mr Cooper Group | Encore Capital vs. CNFinance Holdings | Encore Capital vs. Security National Financial |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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