Correlation Between Cromwell Property and Connecticut Light
Can any of the company-specific risk be diversified away by investing in both Cromwell Property and Connecticut Light 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 Cromwell Property and Connecticut Light into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cromwell Property Group and The Connecticut Light, you can compare the effects of market volatilities on Cromwell Property and Connecticut Light 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 Cromwell Property with a short position of Connecticut Light. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cromwell Property and Connecticut Light.
Diversification Opportunities for Cromwell Property and Connecticut Light
-0.07 | Correlation Coefficient |
Good diversification
The 3 months correlation between Cromwell and Connecticut is -0.07. Overlapping area represents the amount of risk that can be diversified away by holding Cromwell Property Group and The Connecticut Light in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Connecticut Light and Cromwell Property 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 Cromwell Property Group are associated (or correlated) with Connecticut Light. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Connecticut Light has no effect on the direction of Cromwell Property i.e., Cromwell Property and Connecticut Light go up and down completely randomly.
Pair Corralation between Cromwell Property and Connecticut Light
Assuming the 90 days horizon Cromwell Property Group is expected to under-perform the Connecticut Light. But the pink sheet apears to be less risky and, when comparing its historical volatility, Cromwell Property Group is 1.1 times less risky than Connecticut Light. The pink sheet trades about -0.04 of its potential returns per unit of risk. The The Connecticut Light is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest 4,850 in The Connecticut Light on October 12, 2024 and sell it today you would lose (815.00) from holding The Connecticut Light or give up 16.8% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 76.77% |
| Values | Daily Returns |
Cromwell Property Group vs. The Connecticut Light
Performance |
| Timeline |
| Cromwell Property |
| Connecticut Light |
Cromwell Property and Connecticut Light Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cromwell Property and Connecticut Light
The main advantage of trading using opposite Cromwell Property and Connecticut Light positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cromwell Property position performs unexpectedly, Connecticut Light 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 Connecticut Light will offset losses from the drop in Connecticut Light's long position.| Cromwell Property vs. Warner Music Group | Cromwell Property vs. KNOT Offshore Partners | Cromwell Property vs. SBM Offshore NV | Cromwell Property vs. WT Offshore |
| Connecticut Light vs. NH Foods Ltd | Connecticut Light vs. ServiceNow | Connecticut Light vs. Cadence Design Systems | Connecticut Light vs. Rackspace Technology |
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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