Correlation Between Dear Cashmere and Esker SA
Can any of the company-specific risk be diversified away by investing in both Dear Cashmere and Esker SA 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 Dear Cashmere and Esker SA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dear Cashmere Holding and Esker SA, you can compare the effects of market volatilities on Dear Cashmere and Esker SA 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 Dear Cashmere with a short position of Esker SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dear Cashmere and Esker SA.
Diversification Opportunities for Dear Cashmere and Esker SA
0.29 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Dear and Esker is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding Dear Cashmere Holding and Esker SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Esker SA and Dear Cashmere 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 Dear Cashmere Holding are associated (or correlated) with Esker SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Esker SA has no effect on the direction of Dear Cashmere i.e., Dear Cashmere and Esker SA go up and down completely randomly.
Pair Corralation between Dear Cashmere and Esker SA
Given the investment horizon of 90 days Dear Cashmere Holding is expected to generate 5.67 times more return on investment than Esker SA. However, Dear Cashmere is 5.67 times more volatile than Esker SA. It trades about 0.11 of its potential returns per unit of risk. Esker SA is currently generating about -0.22 per unit of risk. If you would invest 9.67 in Dear Cashmere Holding on November 6, 2024 and sell it today you would earn a total of 1.33 from holding Dear Cashmere Holding or generate 13.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.24% |
| Values | Daily Returns |
Dear Cashmere Holding vs. Esker SA
Performance |
| Timeline |
| Dear Cashmere Holding |
| Esker SA |
Dear Cashmere and Esker SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dear Cashmere and Esker SA
The main advantage of trading using opposite Dear Cashmere and Esker SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dear Cashmere position performs unexpectedly, Esker SA 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 Esker SA will offset losses from the drop in Esker SA's long position.| Dear Cashmere vs. One World Universe | Dear Cashmere vs. All American Pet | Dear Cashmere vs. Ilustrato Pictures | Dear Cashmere vs. Quality Industrial Corp |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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