Correlation Between Chestnut Street and Cref Money
Can any of the company-specific risk be diversified away by investing in both Chestnut Street and Cref Money 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 Cref Money 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 Cref Money Market, you can compare the effects of market volatilities on Chestnut Street and Cref Money 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 Cref Money. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chestnut Street and Cref Money.
Diversification Opportunities for Chestnut Street and Cref Money
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Chestnut and Cref is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Chestnut Street Exchange and Cref Money Market in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cref Money Market 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 Cref Money. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cref Money Market has no effect on the direction of Chestnut Street i.e., Chestnut Street and Cref Money go up and down completely randomly.
Pair Corralation between Chestnut Street and Cref Money
Assuming the 90 days horizon Chestnut Street Exchange is expected to generate 32.09 times more return on investment than Cref Money. However, Chestnut Street is 32.09 times more volatile than Cref Money Market. It trades about 0.12 of its potential returns per unit of risk. Cref Money Market is currently generating about 0.96 per unit of risk. If you would invest 95,642 in Chestnut Street Exchange on August 24, 2024 and sell it today you would earn a total of 20,298 from holding Chestnut Street Exchange or generate 21.22% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 99.6% |
| Values | Daily Returns |
Chestnut Street Exchange vs. Cref Money Market
Performance |
| Timeline |
| Chestnut Street Exchange |
| Cref Money Market |
Chestnut Street and Cref Money Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chestnut Street and Cref Money
The main advantage of trading using opposite Chestnut Street and Cref Money positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chestnut Street position performs unexpectedly, Cref Money 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 Cref Money will offset losses from the drop in Cref Money's long position.| Chestnut Street vs. Qs Large Cap | Chestnut Street vs. Federated Mdt Large | Chestnut Street vs. Nuveen Winslow Large Cap | Chestnut Street vs. T Rowe Price |
| Cref Money vs. Government Securities Fund | Cref Money vs. Invesco Government Fund | Cref Money vs. Blackrock Government Bond | Cref Money vs. Us Government Securities |
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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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