Correlation Between Chicago Rivet and Stanley Black
Can any of the company-specific risk be diversified away by investing in both Chicago Rivet and Stanley Black 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 Chicago Rivet and Stanley Black into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Chicago Rivet Machine and Stanley Black Decker, you can compare the effects of market volatilities on Chicago Rivet and Stanley Black 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 Chicago Rivet with a short position of Stanley Black. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chicago Rivet and Stanley Black.
Diversification Opportunities for Chicago Rivet and Stanley Black
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Chicago and Stanley is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Chicago Rivet Machine and Stanley Black Decker in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Stanley Black Decker and Chicago Rivet 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 Chicago Rivet Machine are associated (or correlated) with Stanley Black. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Stanley Black Decker has no effect on the direction of Chicago Rivet i.e., Chicago Rivet and Stanley Black go up and down completely randomly.
Pair Corralation between Chicago Rivet and Stanley Black
Considering the 90-day investment horizon Chicago Rivet Machine is expected to generate 1.39 times more return on investment than Stanley Black. However, Chicago Rivet is 1.39 times more volatile than Stanley Black Decker. It trades about -0.07 of its potential returns per unit of risk. Stanley Black Decker is currently generating about -0.13 per unit of risk. If you would invest 1,797 in Chicago Rivet Machine on November 1, 2024 and sell it today you would lose (281.00) from holding Chicago Rivet Machine or give up 15.64% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 98.77% |
| Values | Daily Returns |
Chicago Rivet Machine vs. Stanley Black Decker
Performance |
| Timeline |
| Chicago Rivet Machine |
| Stanley Black Decker |
Chicago Rivet and Stanley Black Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chicago Rivet and Stanley Black
The main advantage of trading using opposite Chicago Rivet and Stanley Black positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chicago Rivet position performs unexpectedly, Stanley Black 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 Stanley Black will offset losses from the drop in Stanley Black's long position.| Chicago Rivet vs. AMCON Distributing | Chicago Rivet vs. Espey Mfg Electronics | Chicago Rivet vs. Servotronics | Chicago Rivet vs. CompX International |
| Stanley Black vs. Toro Co | Stanley Black vs. Timken Company | Stanley Black vs. Lincoln Electric Holdings | Stanley Black vs. Kennametal |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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