Correlation Between City View and Lotus Ventures
Can any of the company-specific risk be diversified away by investing in both City View and Lotus Ventures 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 City View and Lotus Ventures into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between City View Green and Lotus Ventures, you can compare the effects of market volatilities on City View and Lotus Ventures 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 City View with a short position of Lotus Ventures. Check out your portfolio center. Please also check ongoing floating volatility patterns of City View and Lotus Ventures.
Diversification Opportunities for City View and Lotus Ventures
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between City and Lotus is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding City View Green and Lotus Ventures in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lotus Ventures and City View 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 City View Green are associated (or correlated) with Lotus Ventures. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lotus Ventures has no effect on the direction of City View i.e., City View and Lotus Ventures go up and down completely randomly.
Pair Corralation between City View and Lotus Ventures
Assuming the 90 days horizon City View is expected to generate 1.01 times less return on investment than Lotus Ventures. But when comparing it to its historical volatility, City View Green is 1.38 times less risky than Lotus Ventures. It trades about 0.07 of its potential returns per unit of risk. Lotus Ventures is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 2.00 in Lotus Ventures on August 30, 2024 and sell it today you would lose (1.49) from holding Lotus Ventures or give up 74.5% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 86.06% |
| Values | Daily Returns |
City View Green vs. Lotus Ventures
Performance |
| Timeline |
| City View Green |
| Lotus Ventures |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
City View and Lotus Ventures Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with City View and Lotus Ventures
The main advantage of trading using opposite City View and Lotus Ventures positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if City View position performs unexpectedly, Lotus Ventures 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 Lotus Ventures will offset losses from the drop in Lotus Ventures' long position.| City View vs. Benchmark Botanics | City View vs. Speakeasy Cannabis Club | City View vs. BC Craft Supply | City View vs. Ravenquest Biomed |
| Lotus Ventures vs. Benchmark Botanics | Lotus Ventures vs. Speakeasy Cannabis Club | Lotus Ventures vs. City View Green | Lotus Ventures vs. BC Craft Supply |
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 Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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