Correlation Between CoStar and Cal Bay

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Can any of the company-specific risk be diversified away by investing in both CoStar and Cal Bay 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 CoStar and Cal Bay into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CoStar Group and Cal Bay Intl, you can compare the effects of market volatilities on CoStar and Cal Bay 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 CoStar with a short position of Cal Bay. Check out your portfolio center. Please also check ongoing floating volatility patterns of CoStar and Cal Bay.

Diversification Opportunities for CoStar and Cal Bay

0.0
  Correlation Coefficient

Pay attention - limited upside

The 3 months correlation between CoStar and Cal is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding CoStar Group and Cal Bay Intl in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cal Bay Intl and CoStar 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 CoStar Group are associated (or correlated) with Cal Bay. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cal Bay Intl has no effect on the direction of CoStar i.e., CoStar and Cal Bay go up and down completely randomly.

Pair Corralation between CoStar and Cal Bay

If you would invest  0.01  in Cal Bay Intl on September 25, 2024 and sell it today you would earn a total of  0.00  from holding Cal Bay Intl or generate 0.0% return on investment over 90 days.
Time Period3 Months [change]
DirectionFlat 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

CoStar Group  vs.  Cal Bay Intl

 Performance 
       Timeline  
CoStar Group 

Risk-Adjusted Performance

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Weak
 
Strong
Very Weak
Over the last 90 days CoStar Group has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable technical and fundamental indicators, CoStar is not utilizing all of its potentials. The latest stock price agitation, may contribute to short-term losses for the retail investors.
Cal Bay Intl 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Cal Bay Intl has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong basic indicators, Cal Bay is not utilizing all of its potentials. The latest stock price confusion, may contribute to short-horizon losses for the traders.

CoStar and Cal Bay Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with CoStar and Cal Bay

The main advantage of trading using opposite CoStar and Cal Bay positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CoStar position performs unexpectedly, Cal Bay 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 Cal Bay will offset losses from the drop in Cal Bay's long position.
The idea behind CoStar Group and Cal Bay Intl pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.

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