Correlation Between Craven House and Lords Grp
Can any of the company-specific risk be diversified away by investing in both Craven House and Lords Grp 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 Craven House and Lords Grp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Craven House Capital and Lords Grp Trading, you can compare the effects of market volatilities on Craven House and Lords Grp 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 Craven House with a short position of Lords Grp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Craven House and Lords Grp.
Diversification Opportunities for Craven House and Lords Grp
-0.36 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Craven and Lords is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding Craven House Capital and Lords Grp Trading in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lords Grp Trading and Craven House 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 Craven House Capital are associated (or correlated) with Lords Grp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lords Grp Trading has no effect on the direction of Craven House i.e., Craven House and Lords Grp go up and down completely randomly.
Pair Corralation between Craven House and Lords Grp
Assuming the 90 days trading horizon Craven House Capital is expected to generate 1.51 times more return on investment than Lords Grp. However, Craven House is 1.51 times more volatile than Lords Grp Trading. It trades about 0.21 of its potential returns per unit of risk. Lords Grp Trading is currently generating about -0.35 per unit of risk. If you would invest 23.00 in Craven House Capital on September 13, 2024 and sell it today you would earn a total of 2.00 from holding Craven House Capital or generate 8.7% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Craven House Capital vs. Lords Grp Trading
Performance |
| Timeline |
| Craven House Capital |
| Lords Grp Trading |
Craven House and Lords Grp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Craven House and Lords Grp
The main advantage of trading using opposite Craven House and Lords Grp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Craven House position performs unexpectedly, Lords Grp 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 Lords Grp will offset losses from the drop in Lords Grp's long position.| Craven House vs. Southern Copper Corp | Craven House vs. Endeavour Mining Corp | Craven House vs. Wheaton Precious Metals | Craven House vs. Silvercorp Metals |
| Lords Grp vs. Viridian Therapeutics | Lords Grp vs. CVR Energy | Lords Grp vs. Nationwide Building Society | Lords Grp vs. Dollar Tree |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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