Correlation Between Chrysalis Investments and Caledonia Investments
Can any of the company-specific risk be diversified away by investing in both Chrysalis Investments and Caledonia Investments 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 Chrysalis Investments and Caledonia Investments into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Chrysalis Investments and Caledonia Investments, you can compare the effects of market volatilities on Chrysalis Investments and Caledonia Investments 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 Chrysalis Investments with a short position of Caledonia Investments. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chrysalis Investments and Caledonia Investments.
Diversification Opportunities for Chrysalis Investments and Caledonia Investments
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Chrysalis and Caledonia is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Chrysalis Investments and Caledonia Investments in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Caledonia Investments and Chrysalis Investments 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 Chrysalis Investments are associated (or correlated) with Caledonia Investments. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Caledonia Investments has no effect on the direction of Chrysalis Investments i.e., Chrysalis Investments and Caledonia Investments go up and down completely randomly.
Pair Corralation between Chrysalis Investments and Caledonia Investments
Assuming the 90 days trading horizon Chrysalis Investments is expected to generate 3.56 times more return on investment than Caledonia Investments. However, Chrysalis Investments is 3.56 times more volatile than Caledonia Investments. It trades about 0.03 of its potential returns per unit of risk. Caledonia Investments is currently generating about 0.01 per unit of risk. If you would invest 8,900 in Chrysalis Investments on October 11, 2024 and sell it today you would earn a total of 1,540 from holding Chrysalis Investments or generate 17.3% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 99.6% |
| Values | Daily Returns |
Chrysalis Investments vs. Caledonia Investments
Performance |
| Timeline |
| Chrysalis Investments |
| Caledonia Investments |
Chrysalis Investments and Caledonia Investments Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chrysalis Investments and Caledonia Investments
The main advantage of trading using opposite Chrysalis Investments and Caledonia Investments positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chrysalis Investments position performs unexpectedly, Caledonia Investments 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 Caledonia Investments will offset losses from the drop in Caledonia Investments' long position.| Chrysalis Investments vs. Tetragon Financial Group | Chrysalis Investments vs. Roebuck Food Group | Chrysalis Investments vs. UNIQA Insurance Group | Chrysalis Investments vs. Hilton Food Group |
| Caledonia Investments vs. Chrysalis Investments | Caledonia Investments vs. Tavistock Investments Plc | Caledonia Investments vs. Cairo Communication SpA | Caledonia Investments vs. New Residential Investment |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
Other Complementary Tools
| Aroon Oscillator Analyze current equity momentum using Aroon Oscillator and other momentum ratios | |
| Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules | |
| Technical Analysis Check basic technical indicators and analysis based on most latest market data | |
| Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity | |
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk |