Correlation Between ENGlobal and Cardno
Can any of the company-specific risk be diversified away by investing in both ENGlobal and Cardno 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 ENGlobal and Cardno into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ENGlobal and Cardno Limited, you can compare the effects of market volatilities on ENGlobal and Cardno 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 ENGlobal with a short position of Cardno. Check out your portfolio center. Please also check ongoing floating volatility patterns of ENGlobal and Cardno.
Diversification Opportunities for ENGlobal and Cardno
Very good diversification
The 3 months correlation between ENGlobal and Cardno is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding ENGlobal and Cardno Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cardno Limited and ENGlobal 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 ENGlobal are associated (or correlated) with Cardno. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cardno Limited has no effect on the direction of ENGlobal i.e., ENGlobal and Cardno go up and down completely randomly.
Pair Corralation between ENGlobal and Cardno
Considering the 90-day investment horizon ENGlobal is expected to generate 1.69 times less return on investment than Cardno. In addition to that, ENGlobal is 1.57 times more volatile than Cardno Limited. It trades about 0.03 of its total potential returns per unit of risk. Cardno Limited is currently generating about 0.09 per unit of volatility. If you would invest 30.00 in Cardno Limited on November 2, 2024 and sell it today you would lose (13.00) from holding Cardno Limited or give up 43.33% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 66.16% |
| Values | Daily Returns |
ENGlobal vs. Cardno Limited
Performance |
| Timeline |
| ENGlobal |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Cardno Limited |
ENGlobal and Cardno Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ENGlobal and Cardno
The main advantage of trading using opposite ENGlobal and Cardno positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ENGlobal position performs unexpectedly, Cardno 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 Cardno will offset losses from the drop in Cardno's long position.| ENGlobal vs. Fuel Tech | ENGlobal vs. Polar Power | ENGlobal vs. Ocean Power Technologies | ENGlobal vs. Pioneer Power Solutions |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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