Correlation Between Commercial Vehicle and Cooper Stnd
Can any of the company-specific risk be diversified away by investing in both Commercial Vehicle and Cooper Stnd 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 Commercial Vehicle and Cooper Stnd into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Commercial Vehicle Group and Cooper Stnd, you can compare the effects of market volatilities on Commercial Vehicle and Cooper Stnd 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 Commercial Vehicle with a short position of Cooper Stnd. Check out your portfolio center. Please also check ongoing floating volatility patterns of Commercial Vehicle and Cooper Stnd.
Diversification Opportunities for Commercial Vehicle and Cooper Stnd
-0.15 | Correlation Coefficient |
Good diversification
The 3 months correlation between Commercial and Cooper is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding Commercial Vehicle Group and Cooper Stnd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cooper Stnd and Commercial Vehicle 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 Commercial Vehicle Group are associated (or correlated) with Cooper Stnd. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cooper Stnd has no effect on the direction of Commercial Vehicle i.e., Commercial Vehicle and Cooper Stnd go up and down completely randomly.
Pair Corralation between Commercial Vehicle and Cooper Stnd
Given the investment horizon of 90 days Commercial Vehicle Group is expected to under-perform the Cooper Stnd. But the stock apears to be less risky and, when comparing its historical volatility, Commercial Vehicle Group is 1.48 times less risky than Cooper Stnd. The stock trades about -0.09 of its potential returns per unit of risk. The Cooper Stnd is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 1,150 in Cooper Stnd on August 27, 2024 and sell it today you would earn a total of 292.00 from holding Cooper Stnd or generate 25.39% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Commercial Vehicle Group vs. Cooper Stnd
Performance |
| Timeline |
| Commercial Vehicle |
| Cooper Stnd |
Commercial Vehicle and Cooper Stnd Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Commercial Vehicle and Cooper Stnd
The main advantage of trading using opposite Commercial Vehicle and Cooper Stnd positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Commercial Vehicle position performs unexpectedly, Cooper Stnd 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 Cooper Stnd will offset losses from the drop in Cooper Stnd's long position.| Commercial Vehicle vs. Motorcar Parts of | Commercial Vehicle vs. Monro Muffler Brake | Commercial Vehicle vs. Stoneridge | Commercial Vehicle vs. Superior Industries International |
| Cooper Stnd vs. Dorman Products | Cooper Stnd vs. Monro Muffler Brake | Cooper Stnd vs. Standard Motor Products | Cooper Stnd vs. Stoneridge |
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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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