Correlation Between Financial and CBH
Can any of the company-specific risk be diversified away by investing in both Financial and CBH 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 Financial and CBH into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Financial 15 Split and CBH, you can compare the effects of market volatilities on Financial and CBH 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 Financial with a short position of CBH. Check out your portfolio center. Please also check ongoing floating volatility patterns of Financial and CBH.
Diversification Opportunities for Financial and CBH
Very good diversification
The 3 months correlation between Financial and CBH is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding Financial 15 Split and CBH in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CBH and Financial 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 Financial 15 Split are associated (or correlated) with CBH. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CBH has no effect on the direction of Financial i.e., Financial and CBH go up and down completely randomly.
Pair Corralation between Financial and CBH
Assuming the 90 days horizon Financial 15 Split is expected to generate 2.23 times more return on investment than CBH. However, Financial is 2.23 times more volatile than CBH. It trades about 0.06 of its potential returns per unit of risk. CBH is currently generating about 0.06 per unit of risk. If you would invest 523.00 in Financial 15 Split on November 2, 2024 and sell it today you would earn a total of 142.00 from holding Financial 15 Split or generate 27.15% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 84.4% |
| Values | Daily Returns |
Financial 15 Split vs. CBH
Performance |
| Timeline |
| Financial 15 Split |
| CBH |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Financial and CBH Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Financial and CBH
The main advantage of trading using opposite Financial and CBH positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Financial position performs unexpectedly, CBH 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 CBH will offset losses from the drop in CBH's long position.| Financial vs. SEI Investments | Financial vs. Oxford Lane Capital | Financial vs. Blackstone Group | Financial vs. North American Financial |
| CBH vs. Eaton Vance National | CBH vs. Blackrock Muniholdings Ny | CBH vs. Nuveen California Select | CBH vs. MFS Investment Grade |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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