Correlation Between Alphabet and Stingray
Can any of the company-specific risk be diversified away by investing in both Alphabet and Stingray 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 Alphabet and Stingray into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Alphabet Inc CDR and Stingray Group, you can compare the effects of market volatilities on Alphabet and Stingray 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 Alphabet with a short position of Stingray. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alphabet and Stingray.
Diversification Opportunities for Alphabet and Stingray
Very good diversification
The 3 months correlation between Alphabet and Stingray is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding Alphabet Inc CDR and Stingray Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Stingray Group and Alphabet 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 Alphabet Inc CDR are associated (or correlated) with Stingray. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Stingray Group has no effect on the direction of Alphabet i.e., Alphabet and Stingray go up and down completely randomly.
Pair Corralation between Alphabet and Stingray
Assuming the 90 days trading horizon Alphabet Inc CDR is expected to under-perform the Stingray. In addition to that, Alphabet is 1.11 times more volatile than Stingray Group. It trades about -0.33 of its total potential returns per unit of risk. Stingray Group is currently generating about 0.2 per unit of volatility. If you would invest 802.00 in Stingray Group on December 4, 2024 and sell it today you would earn a total of 77.00 from holding Stingray Group or generate 9.6% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Alphabet Inc CDR vs. Stingray Group
Performance |
| Timeline |
| Alphabet CDR |
| Stingray Group |
Alphabet and Stingray Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Alphabet and Stingray
The main advantage of trading using opposite Alphabet and Stingray positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alphabet position performs unexpectedly, Stingray 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 Stingray will offset losses from the drop in Stingray's long position.| Alphabet vs. Data Communications Management | Alphabet vs. Cogeco Communications | Alphabet vs. Verizon Communications CDR | Alphabet vs. Partners Value Investments |
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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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