Correlation Between Cromwell Property and Union Electric
Can any of the company-specific risk be diversified away by investing in both Cromwell Property and Union Electric 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 Union Electric 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 Union Electric, you can compare the effects of market volatilities on Cromwell Property and Union Electric 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 Union Electric. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cromwell Property and Union Electric.
Diversification Opportunities for Cromwell Property and Union Electric
-0.4 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Cromwell and Union is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding Cromwell Property Group and Union Electric in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Union Electric 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 Union Electric. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Union Electric has no effect on the direction of Cromwell Property i.e., Cromwell Property and Union Electric go up and down completely randomly.
Pair Corralation between Cromwell Property and Union Electric
Assuming the 90 days horizon Cromwell Property Group is expected to generate 0.25 times more return on investment than Union Electric. However, Cromwell Property Group is 4.01 times less risky than Union Electric. It trades about 0.23 of its potential returns per unit of risk. Union Electric is currently generating about -0.35 per unit of risk. If you would invest 27.00 in Cromwell Property Group on October 9, 2024 and sell it today you would earn a total of 1.00 from holding Cromwell Property Group or generate 3.7% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cromwell Property Group vs. Union Electric
Performance |
| Timeline |
| Cromwell Property |
| Union Electric |
Cromwell Property and Union Electric Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cromwell Property and Union Electric
The main advantage of trading using opposite Cromwell Property and Union Electric positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cromwell Property position performs unexpectedly, Union Electric 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 Union Electric will offset losses from the drop in Union Electric's long position.| Cromwell Property vs. SNDL Inc | Cromwell Property vs. Kaiser Aluminum | Cromwell Property vs. Lizhan Environmental | Cromwell Property vs. WK Kellogg Co |
| Union Electric vs. Engie Brasil Energia | Union Electric vs. Centrais Eltricas Brasileiras | Union Electric vs. Centrais Electricas Brasileiras | Union Electric vs. Ameren Corp |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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