Correlation Between Grand Havana and Scepter Holdings
Can any of the company-specific risk be diversified away by investing in both Grand Havana and Scepter Holdings 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 Grand Havana and Scepter Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Grand Havana and Scepter Holdings, you can compare the effects of market volatilities on Grand Havana and Scepter Holdings 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 Grand Havana with a short position of Scepter Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Grand Havana and Scepter Holdings.
Diversification Opportunities for Grand Havana and Scepter Holdings
0.46 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Grand and Scepter is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding Grand Havana and Scepter Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Scepter Holdings and Grand Havana 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 Grand Havana are associated (or correlated) with Scepter Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Scepter Holdings has no effect on the direction of Grand Havana i.e., Grand Havana and Scepter Holdings go up and down completely randomly.
Pair Corralation between Grand Havana and Scepter Holdings
Given the investment horizon of 90 days Grand Havana is expected to generate 4.28 times less return on investment than Scepter Holdings. But when comparing it to its historical volatility, Grand Havana is 1.54 times less risky than Scepter Holdings. It trades about 0.11 of its potential returns per unit of risk. Scepter Holdings is currently generating about 0.31 of returns per unit of risk over similar time horizon. If you would invest 0.08 in Scepter Holdings on November 29, 2024 and sell it today you would earn a total of 0.11 from holding Scepter Holdings or generate 137.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Grand Havana vs. Scepter Holdings
Performance |
| Timeline |
| Grand Havana |
| Scepter Holdings |
Grand Havana and Scepter Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Grand Havana and Scepter Holdings
The main advantage of trading using opposite Grand Havana and Scepter Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Grand Havana position performs unexpectedly, Scepter Holdings 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 Scepter Holdings will offset losses from the drop in Scepter Holdings' long position.| Grand Havana vs. Right On Brands | Grand Havana vs. BioAdaptives | Grand Havana vs. Yuenglings Ice Cream | Grand Havana vs. Bit Origin |
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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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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