Correlation Between Caldwell Partners and Baylin Technologies
Can any of the company-specific risk be diversified away by investing in both Caldwell Partners and Baylin Technologies 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 Caldwell Partners and Baylin Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Caldwell Partners International and Baylin Technologies, you can compare the effects of market volatilities on Caldwell Partners and Baylin Technologies 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 Caldwell Partners with a short position of Baylin Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Caldwell Partners and Baylin Technologies.
Diversification Opportunities for Caldwell Partners and Baylin Technologies
-0.13 | Correlation Coefficient |
Good diversification
The 3 months correlation between Caldwell and Baylin is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding Caldwell Partners Internationa and Baylin Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Baylin Technologies and Caldwell Partners 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 Caldwell Partners International are associated (or correlated) with Baylin Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Baylin Technologies has no effect on the direction of Caldwell Partners i.e., Caldwell Partners and Baylin Technologies go up and down completely randomly.
Pair Corralation between Caldwell Partners and Baylin Technologies
Assuming the 90 days trading horizon Caldwell Partners International is expected to generate 0.58 times more return on investment than Baylin Technologies. However, Caldwell Partners International is 1.74 times less risky than Baylin Technologies. It trades about 0.09 of its potential returns per unit of risk. Baylin Technologies is currently generating about -0.11 per unit of risk. If you would invest 104.00 in Caldwell Partners International on August 31, 2024 and sell it today you would earn a total of 7.00 from holding Caldwell Partners International or generate 6.73% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Caldwell Partners Internationa vs. Baylin Technologies
Performance |
| Timeline |
| Caldwell Partners |
| Baylin Technologies |
Caldwell Partners and Baylin Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Caldwell Partners and Baylin Technologies
The main advantage of trading using opposite Caldwell Partners and Baylin Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Caldwell Partners position performs unexpectedly, Baylin Technologies 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 Baylin Technologies will offset losses from the drop in Baylin Technologies' long position.| Caldwell Partners vs. Baylin Technologies | Caldwell Partners vs. Supremex | Caldwell Partners vs. iShares Canadian HYBrid | Caldwell Partners vs. Brompton European Dividend |
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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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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