Correlation Between CAP LEASE and Rockfire Resources
Can any of the company-specific risk be diversified away by investing in both CAP LEASE and Rockfire Resources 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 CAP LEASE and Rockfire Resources into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CAP LEASE AVIATION and Rockfire Resources plc, you can compare the effects of market volatilities on CAP LEASE and Rockfire Resources 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 CAP LEASE with a short position of Rockfire Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of CAP LEASE and Rockfire Resources.
Diversification Opportunities for CAP LEASE and Rockfire Resources
-0.6 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between CAP and Rockfire is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding CAP LEASE AVIATION and Rockfire Resources plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Rockfire Resources plc and CAP LEASE 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 CAP LEASE AVIATION are associated (or correlated) with Rockfire Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Rockfire Resources plc has no effect on the direction of CAP LEASE i.e., CAP LEASE and Rockfire Resources go up and down completely randomly.
Pair Corralation between CAP LEASE and Rockfire Resources
If you would invest 50.00 in CAP LEASE AVIATION on October 25, 2024 and sell it today you would earn a total of 0.00 from holding CAP LEASE AVIATION or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
CAP LEASE AVIATION vs. Rockfire Resources plc
Performance |
| Timeline |
| CAP LEASE AVIATION |
| Rockfire Resources plc |
CAP LEASE and Rockfire Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CAP LEASE and Rockfire Resources
The main advantage of trading using opposite CAP LEASE and Rockfire Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CAP LEASE position performs unexpectedly, Rockfire Resources 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 Rockfire Resources will offset losses from the drop in Rockfire Resources' long position.| CAP LEASE vs. Oxford Technology 2 | CAP LEASE vs. Polar Capital Technology | CAP LEASE vs. International Biotechnology Trust | CAP LEASE vs. Take Two Interactive Software |
| Rockfire Resources vs. Vitec Software Group | Rockfire Resources vs. Young Cos Brewery | Rockfire Resources vs. CAP LEASE AVIATION | Rockfire Resources vs. Check Point Software |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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