Correlation Between Churchill Downs and La Française
Can any of the company-specific risk be diversified away by investing in both Churchill Downs and La Française 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 Churchill Downs and La Française into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Churchill Downs Incorporated and La Franaise des, you can compare the effects of market volatilities on Churchill Downs and La Française 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 Churchill Downs with a short position of La Française. Check out your portfolio center. Please also check ongoing floating volatility patterns of Churchill Downs and La Française.
Diversification Opportunities for Churchill Downs and La Française
0.24 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Churchill and 1WE is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding Churchill Downs Incorporated and La Franaise des in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on La Franaise des and Churchill Downs 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 Churchill Downs Incorporated are associated (or correlated) with La Française. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of La Franaise des has no effect on the direction of Churchill Downs i.e., Churchill Downs and La Française go up and down completely randomly.
Pair Corralation between Churchill Downs and La Française
Assuming the 90 days trading horizon Churchill Downs Incorporated is expected to generate 1.26 times more return on investment than La Française. However, Churchill Downs is 1.26 times more volatile than La Franaise des. It trades about 0.14 of its potential returns per unit of risk. La Franaise des is currently generating about -0.25 per unit of risk. If you would invest 12,600 in Churchill Downs Incorporated on September 3, 2024 and sell it today you would earn a total of 700.00 from holding Churchill Downs Incorporated or generate 5.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Churchill Downs Incorporated vs. La Franaise des
Performance |
| Timeline |
| Churchill Downs |
| La Franaise des |
Churchill Downs and La Française Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Churchill Downs and La Française
The main advantage of trading using opposite Churchill Downs and La Française positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Churchill Downs position performs unexpectedly, La Française 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 La Française will offset losses from the drop in La Française's long position.| Churchill Downs vs. CEOTRONICS | Churchill Downs vs. Media and Games | Churchill Downs vs. AWILCO DRILLING PLC | Churchill Downs vs. BJs Restaurants |
| La Française vs. Bausch Health Companies | La Française vs. SENECA FOODS A | La Française vs. Ramsay Health Care | La Française vs. NXP Semiconductors NV |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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