Correlation Between Chestnut Street and Power Floating
Can any of the company-specific risk be diversified away by investing in both Chestnut Street and Power Floating 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 Chestnut Street and Power Floating into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Chestnut Street Exchange and Power Floating Rate, you can compare the effects of market volatilities on Chestnut Street and Power Floating 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 Chestnut Street with a short position of Power Floating. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chestnut Street and Power Floating.
Diversification Opportunities for Chestnut Street and Power Floating
0.91 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Chestnut and Power is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Chestnut Street Exchange and Power Floating Rate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Power Floating Rate and Chestnut Street 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 Chestnut Street Exchange are associated (or correlated) with Power Floating. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Power Floating Rate has no effect on the direction of Chestnut Street i.e., Chestnut Street and Power Floating go up and down completely randomly.
Pair Corralation between Chestnut Street and Power Floating
Assuming the 90 days horizon Chestnut Street Exchange is expected to generate 6.65 times more return on investment than Power Floating. However, Chestnut Street is 6.65 times more volatile than Power Floating Rate. It trades about 0.12 of its potential returns per unit of risk. Power Floating Rate is currently generating about 0.39 per unit of risk. If you would invest 95,666 in Chestnut Street Exchange on September 14, 2024 and sell it today you would earn a total of 21,661 from holding Chestnut Street Exchange or generate 22.64% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Chestnut Street Exchange vs. Power Floating Rate
Performance |
| Timeline |
| Chestnut Street Exchange |
| Power Floating Rate |
Chestnut Street and Power Floating Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chestnut Street and Power Floating
The main advantage of trading using opposite Chestnut Street and Power Floating positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chestnut Street position performs unexpectedly, Power Floating 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 Power Floating will offset losses from the drop in Power Floating's long position.| Chestnut Street vs. Janus Global Technology | Chestnut Street vs. Invesco Technology Fund | Chestnut Street vs. Mfs Technology Fund | Chestnut Street vs. Science Technology Fund |
| Power Floating vs. Prudential Government Money | Power Floating vs. Chestnut Street Exchange | Power Floating vs. John Hancock Money | Power Floating vs. Ab Government Exchange |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
Other Complementary Tools
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators | |
| Global Correlations Find global opportunities by holding instruments from different markets | |
| Transaction History View history of all your transactions and understand their impact on performance | |
| Analyst Advice Analyst recommendations and target price estimates broken down by several categories | |
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities |