Correlation Between Collins Foods and Clime Investment
Can any of the company-specific risk be diversified away by investing in both Collins Foods and Clime Investment 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 Collins Foods and Clime Investment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Collins Foods and Clime Investment Management, you can compare the effects of market volatilities on Collins Foods and Clime Investment 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 Collins Foods with a short position of Clime Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Collins Foods and Clime Investment.
Diversification Opportunities for Collins Foods and Clime Investment
0.48 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Collins and Clime is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding Collins Foods and Clime Investment Management in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Clime Investment Man and Collins Foods 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 Collins Foods are associated (or correlated) with Clime Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Clime Investment Man has no effect on the direction of Collins Foods i.e., Collins Foods and Clime Investment go up and down completely randomly.
Pair Corralation between Collins Foods and Clime Investment
Assuming the 90 days trading horizon Collins Foods is expected to generate 0.87 times more return on investment than Clime Investment. However, Collins Foods is 1.15 times less risky than Clime Investment. It trades about 0.02 of its potential returns per unit of risk. Clime Investment Management is currently generating about 0.0 per unit of risk. If you would invest 768.00 in Collins Foods on August 31, 2024 and sell it today you would earn a total of 91.00 from holding Collins Foods or generate 11.85% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 99.74% |
| Values | Daily Returns |
Collins Foods vs. Clime Investment Management
Performance |
| Timeline |
| Collins Foods |
| Clime Investment Man |
Collins Foods and Clime Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Collins Foods and Clime Investment
The main advantage of trading using opposite Collins Foods and Clime Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Collins Foods position performs unexpectedly, Clime Investment 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 Clime Investment will offset losses from the drop in Clime Investment's long position.| Collins Foods vs. Aneka Tambang Tbk | Collins Foods vs. Unibail Rodamco Westfield SE | Collins Foods vs. Macquarie Group | Collins Foods vs. Commonwealth Bank |
| Clime Investment vs. Magellan Financial Group | Clime Investment vs. Wt Financial Group | Clime Investment vs. Qbe Insurance Group | Clime Investment vs. Spirit Telecom |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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