Correlation Between Dear Cashmere and Rosinbomb
Can any of the company-specific risk be diversified away by investing in both Dear Cashmere and Rosinbomb 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 Rosinbomb 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 Rosinbomb, you can compare the effects of market volatilities on Dear Cashmere and Rosinbomb 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 Rosinbomb. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dear Cashmere and Rosinbomb.
Diversification Opportunities for Dear Cashmere and Rosinbomb
0.1 | Correlation Coefficient |
Average diversification
The 3 months correlation between Dear and Rosinbomb is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding Dear Cashmere Holding and Rosinbomb in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Rosinbomb 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 Rosinbomb. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Rosinbomb has no effect on the direction of Dear Cashmere i.e., Dear Cashmere and Rosinbomb go up and down completely randomly.
Pair Corralation between Dear Cashmere and Rosinbomb
Given the investment horizon of 90 days Dear Cashmere is expected to generate 1.31 times less return on investment than Rosinbomb. But when comparing it to its historical volatility, Dear Cashmere Holding is 1.25 times less risky than Rosinbomb. It trades about 0.17 of its potential returns per unit of risk. Rosinbomb is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest 0.15 in Rosinbomb on September 3, 2024 and sell it today you would earn a total of 0.15 from holding Rosinbomb or generate 100.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dear Cashmere Holding vs. Rosinbomb
Performance |
| Timeline |
| Dear Cashmere Holding |
| Rosinbomb |
Dear Cashmere and Rosinbomb Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dear Cashmere and Rosinbomb
The main advantage of trading using opposite Dear Cashmere and Rosinbomb positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dear Cashmere position performs unexpectedly, Rosinbomb 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 Rosinbomb will offset losses from the drop in Rosinbomb's long position.| Dear Cashmere vs. Salesforce | Dear Cashmere vs. SAP SE ADR | Dear Cashmere vs. ServiceNow | Dear Cashmere vs. Intuit Inc |
| Rosinbomb vs. Dear Cashmere Holding | Rosinbomb vs. Goff Corp | Rosinbomb vs. Wialan Technologies | Rosinbomb vs. Cgrowth Capital |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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