Correlation Between Castle Peak and City Sports
Can any of the company-specific risk be diversified away by investing in both Castle Peak and City Sports 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 Castle Peak and City Sports into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Castle Peak Holdings and City Sports and, you can compare the effects of market volatilities on Castle Peak and City Sports 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 Castle Peak with a short position of City Sports. Check out your portfolio center. Please also check ongoing floating volatility patterns of Castle Peak and City Sports.
Diversification Opportunities for Castle Peak and City Sports
-0.82 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Castle and City is -0.82. Overlapping area represents the amount of risk that can be diversified away by holding Castle Peak Holdings and City Sports and in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on City Sports and Castle Peak 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 Castle Peak Holdings are associated (or correlated) with City Sports. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of City Sports has no effect on the direction of Castle Peak i.e., Castle Peak and City Sports go up and down completely randomly.
Pair Corralation between Castle Peak and City Sports
Assuming the 90 days trading horizon Castle Peak is expected to generate 1.29 times less return on investment than City Sports. In addition to that, Castle Peak is 1.0 times more volatile than City Sports and. It trades about 0.03 of its total potential returns per unit of risk. City Sports and is currently generating about 0.04 per unit of volatility. If you would invest 6,626 in City Sports and on October 13, 2024 and sell it today you would earn a total of 2,349 from holding City Sports and or generate 35.45% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 99.79% |
| Values | Daily Returns |
Castle Peak Holdings vs. City Sports and
Performance |
| Timeline |
| Castle Peak Holdings |
| City Sports |
Castle Peak and City Sports Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Castle Peak and City Sports
The main advantage of trading using opposite Castle Peak and City Sports positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Castle Peak position performs unexpectedly, City Sports 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 City Sports will offset losses from the drop in City Sports' long position.| Castle Peak vs. Chumporn Palm Oil | Castle Peak vs. CPL Group Public | Castle Peak vs. Asia Fiber Public | Castle Peak vs. Chiangmai Frozen Foods |
| City Sports vs. Chiangmai Frozen Foods | City Sports vs. Dynasty Ceramic Public | City Sports vs. Castle Peak Holdings | City Sports vs. CPL Group Public |
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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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