Correlation Between First Ship and Cadence Design
Can any of the company-specific risk be diversified away by investing in both First Ship and Cadence Design 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 First Ship and Cadence Design into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between First Ship Lease and Cadence Design Systems, you can compare the effects of market volatilities on First Ship and Cadence Design 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 First Ship with a short position of Cadence Design. Check out your portfolio center. Please also check ongoing floating volatility patterns of First Ship and Cadence Design.
Diversification Opportunities for First Ship and Cadence Design
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between First and Cadence is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding First Ship Lease and Cadence Design Systems in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cadence Design Systems and First Ship 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 First Ship Lease are associated (or correlated) with Cadence Design. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cadence Design Systems has no effect on the direction of First Ship i.e., First Ship and Cadence Design go up and down completely randomly.
Pair Corralation between First Ship and Cadence Design
Assuming the 90 days horizon First Ship Lease is expected to generate 1.79 times more return on investment than Cadence Design. However, First Ship is 1.79 times more volatile than Cadence Design Systems. It trades about 0.07 of its potential returns per unit of risk. Cadence Design Systems is currently generating about 0.04 per unit of risk. If you would invest 2.50 in First Ship Lease on August 25, 2024 and sell it today you would earn a total of 1.50 from holding First Ship Lease or generate 60.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
First Ship Lease vs. Cadence Design Systems
Performance |
| Timeline |
| First Ship Lease |
| Cadence Design Systems |
First Ship and Cadence Design Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with First Ship and Cadence Design
The main advantage of trading using opposite First Ship and Cadence Design positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if First Ship position performs unexpectedly, Cadence Design 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 Cadence Design will offset losses from the drop in Cadence Design's long position.| First Ship vs. Tandem Diabetes Care | First Ship vs. Microbot Medical | First Ship vs. LENSAR Inc | First Ship vs. Cumberland Pharmaceuticals |
| Cadence Design vs. OLB Group | Cadence Design vs. Friendable | Cadence Design vs. Trust Stamp | Cadence Design vs. Infobird Co |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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