Correlation Between Grand Havana and Central Garden
Can any of the company-specific risk be diversified away by investing in both Grand Havana and Central Garden 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 Central Garden into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Grand Havana and Central Garden Pet, you can compare the effects of market volatilities on Grand Havana and Central Garden 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 Central Garden. Check out your portfolio center. Please also check ongoing floating volatility patterns of Grand Havana and Central Garden.
Diversification Opportunities for Grand Havana and Central Garden
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Grand and Central is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Grand Havana and Central Garden Pet in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Central Garden Pet 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 Central Garden. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Central Garden Pet has no effect on the direction of Grand Havana i.e., Grand Havana and Central Garden go up and down completely randomly.
Pair Corralation between Grand Havana and Central Garden
Given the investment horizon of 90 days Grand Havana is expected to generate 5.67 times more return on investment than Central Garden. However, Grand Havana is 5.67 times more volatile than Central Garden Pet. It trades about 0.11 of its potential returns per unit of risk. Central Garden Pet is currently generating about 0.41 per unit of risk. If you would invest 0.07 in Grand Havana on August 24, 2024 and sell it today you would earn a total of 0.01 from holding Grand Havana or generate 14.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Grand Havana vs. Central Garden Pet
Performance |
| Timeline |
| Grand Havana |
| Central Garden Pet |
Grand Havana and Central Garden Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Grand Havana and Central Garden
The main advantage of trading using opposite Grand Havana and Central Garden positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Grand Havana position performs unexpectedly, Central Garden 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 Central Garden will offset losses from the drop in Central Garden's long position.| Grand Havana vs. Right On Brands | Grand Havana vs. BioAdaptives | Grand Havana vs. Yuenglings Ice Cream | Grand Havana vs. Bit Origin |
| Central Garden vs. Seneca Foods Corp | Central Garden vs. Natures Sunshine Products | Central Garden vs. J J Snack | Central Garden vs. John B Sanfilippo |
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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