Correlation Between Choom Holdings and BZAM
Can any of the company-specific risk be diversified away by investing in both Choom Holdings and BZAM 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 Choom Holdings and BZAM into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Choom Holdings and BZAM, you can compare the effects of market volatilities on Choom Holdings and BZAM 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 Choom Holdings with a short position of BZAM. Check out your portfolio center. Please also check ongoing floating volatility patterns of Choom Holdings and BZAM.
Diversification Opportunities for Choom Holdings and BZAM
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Choom and BZAM is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Choom Holdings and BZAM in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BZAM and Choom Holdings 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 Choom Holdings are associated (or correlated) with BZAM. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BZAM has no effect on the direction of Choom Holdings i.e., Choom Holdings and BZAM go up and down completely randomly.
Pair Corralation between Choom Holdings and BZAM
Assuming the 90 days horizon Choom Holdings is expected to generate 1.48 times more return on investment than BZAM. However, Choom Holdings is 1.48 times more volatile than BZAM. It trades about 0.12 of its potential returns per unit of risk. BZAM is currently generating about 0.08 per unit of risk. If you would invest 0.09 in Choom Holdings on August 26, 2024 and sell it today you would lose (0.09) from holding Choom Holdings or give up 100.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Choom Holdings vs. BZAM
Performance |
| Timeline |
| Choom Holdings |
| BZAM |
Choom Holdings and BZAM Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Choom Holdings and BZAM
The main advantage of trading using opposite Choom Holdings and BZAM positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Choom Holdings position performs unexpectedly, BZAM 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 BZAM will offset losses from the drop in BZAM's long position.| Choom Holdings vs. Green Cures Botanical | Choom Holdings vs. Galexxy Holdings | Choom Holdings vs. Indoor Harvest Corp | Choom Holdings vs. Speakeasy Cannabis Club |
| BZAM vs. Udemy Inc | BZAM vs. Bright Scholar Education | BZAM vs. Evolution Mining | BZAM vs. WEBTOON Entertainment Common |
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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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