Correlation Between Flagship Investments and Clime Investment
Can any of the company-specific risk be diversified away by investing in both Flagship Investments and Clime Investment 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 Flagship Investments and Clime Investment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Flagship Investments and Clime Investment Management, you can compare the effects of market volatilities on Flagship Investments and Clime Investment 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 Flagship Investments with a short position of Clime Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Flagship Investments and Clime Investment.
Diversification Opportunities for Flagship Investments and Clime Investment
0.2 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Flagship and Clime is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding Flagship Investments and Clime Investment Management in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Clime Investment Man and Flagship Investments 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 Flagship Investments are associated (or correlated) with Clime Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Clime Investment Man has no effect on the direction of Flagship Investments i.e., Flagship Investments and Clime Investment go up and down completely randomly.
Pair Corralation between Flagship Investments and Clime Investment
Assuming the 90 days trading horizon Flagship Investments is expected to generate 0.67 times more return on investment than Clime Investment. However, Flagship Investments is 1.49 times less risky than Clime Investment. It trades about 0.04 of its potential returns per unit of risk. Clime Investment Management is currently generating about -0.02 per unit of risk. If you would invest 170.00 in Flagship Investments on August 29, 2024 and sell it today you would earn a total of 40.00 from holding Flagship Investments or generate 23.53% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Flagship Investments vs. Clime Investment Management
Performance |
| Timeline |
| Flagship Investments |
| Clime Investment Man |
Flagship Investments and Clime Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Flagship Investments and Clime Investment
The main advantage of trading using opposite Flagship Investments and Clime Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Flagship Investments position performs unexpectedly, Clime Investment 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 Clime Investment will offset losses from the drop in Clime Investment's long position.| Flagship Investments vs. Australian Foundation Investment | Flagship Investments vs. GQG Partners DRC | Flagship Investments vs. Metrics Master Income | Flagship Investments vs. L1 Long Short |
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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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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