Correlation Between Central Retail and Comanche International
Can any of the company-specific risk be diversified away by investing in both Central Retail and Comanche International 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 Central Retail and Comanche International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Central Retail and Comanche International Public, you can compare the effects of market volatilities on Central Retail and Comanche International 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 Central Retail with a short position of Comanche International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Central Retail and Comanche International.
Diversification Opportunities for Central Retail and Comanche International
-0.37 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Central and Comanche is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding Central Retail and Comanche International Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Comanche International and Central Retail 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 Central Retail are associated (or correlated) with Comanche International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Comanche International has no effect on the direction of Central Retail i.e., Central Retail and Comanche International go up and down completely randomly.
Pair Corralation between Central Retail and Comanche International
Assuming the 90 days trading horizon Central Retail is expected to generate 0.4 times more return on investment than Comanche International. However, Central Retail is 2.48 times less risky than Comanche International. It trades about -0.02 of its potential returns per unit of risk. Comanche International Public is currently generating about -0.07 per unit of risk. If you would invest 4,255 in Central Retail on September 3, 2024 and sell it today you would lose (830.00) from holding Central Retail or give up 19.51% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Central Retail vs. Comanche International Public
Performance |
| Timeline |
| Central Retail |
| Comanche International |
Central Retail and Comanche International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Central Retail and Comanche International
The main advantage of trading using opposite Central Retail and Comanche International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Central Retail position performs unexpectedly, Comanche International 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 Comanche International will offset losses from the drop in Comanche International's long position.| Central Retail vs. Premier Marketing Public | Central Retail vs. Porn Prom Metal | Central Retail vs. Mena Transport Public | Central Retail vs. Thai Life Insurance |
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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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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