Correlation Between CAP LEASE and Tissue Regenix
Can any of the company-specific risk be diversified away by investing in both CAP LEASE and Tissue Regenix 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 Tissue Regenix 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 Tissue Regenix Group, you can compare the effects of market volatilities on CAP LEASE and Tissue Regenix 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 Tissue Regenix. Check out your portfolio center. Please also check ongoing floating volatility patterns of CAP LEASE and Tissue Regenix.
Diversification Opportunities for CAP LEASE and Tissue Regenix
-0.53 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between CAP and Tissue is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding CAP LEASE AVIATION and Tissue Regenix Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tissue Regenix Group 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 Tissue Regenix. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tissue Regenix Group has no effect on the direction of CAP LEASE i.e., CAP LEASE and Tissue Regenix go up and down completely randomly.
Pair Corralation between CAP LEASE and Tissue Regenix
Assuming the 90 days trading horizon CAP LEASE AVIATION is expected to generate 0.5 times more return on investment than Tissue Regenix. However, CAP LEASE AVIATION is 2.02 times less risky than Tissue Regenix. It trades about 0.22 of its potential returns per unit of risk. Tissue Regenix Group is currently generating about 0.03 per unit of risk. If you would invest 48.00 in CAP LEASE AVIATION on October 11, 2024 and sell it today you would earn a total of 2.00 from holding CAP LEASE AVIATION or generate 4.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.0% |
| Values | Daily Returns |
CAP LEASE AVIATION vs. Tissue Regenix Group
Performance |
| Timeline |
| CAP LEASE AVIATION |
| Tissue Regenix Group |
CAP LEASE and Tissue Regenix Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CAP LEASE and Tissue Regenix
The main advantage of trading using opposite CAP LEASE and Tissue Regenix positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CAP LEASE position performs unexpectedly, Tissue Regenix 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 Tissue Regenix will offset losses from the drop in Tissue Regenix's long position.| CAP LEASE vs. First Class Metals | CAP LEASE vs. Hochschild Mining plc | CAP LEASE vs. Metals Exploration Plc | CAP LEASE vs. Capital Metals PLC |
| Tissue Regenix vs. Associated British Foods | Tissue Regenix vs. Take Two Interactive Software | Tissue Regenix vs. Polar Capital Technology | Tissue Regenix vs. CAP LEASE AVIATION |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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