Correlation Between Staude Capital and CAR GROUP
Can any of the company-specific risk be diversified away by investing in both Staude Capital and CAR GROUP 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 Staude Capital and CAR GROUP into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Staude Capital Global and CAR GROUP LIMITED, you can compare the effects of market volatilities on Staude Capital and CAR GROUP 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 Staude Capital with a short position of CAR GROUP. Check out your portfolio center. Please also check ongoing floating volatility patterns of Staude Capital and CAR GROUP.
Diversification Opportunities for Staude Capital and CAR GROUP
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Staude and CAR is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Staude Capital Global and CAR GROUP LIMITED in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CAR GROUP LIMITED and Staude Capital 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 Staude Capital Global are associated (or correlated) with CAR GROUP. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CAR GROUP LIMITED has no effect on the direction of Staude Capital i.e., Staude Capital and CAR GROUP go up and down completely randomly.
Pair Corralation between Staude Capital and CAR GROUP
Assuming the 90 days trading horizon Staude Capital is expected to generate 2.41 times less return on investment than CAR GROUP. But when comparing it to its historical volatility, Staude Capital Global is 1.1 times less risky than CAR GROUP. It trades about 0.05 of its potential returns per unit of risk. CAR GROUP LIMITED is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 2,052 in CAR GROUP LIMITED on September 3, 2024 and sell it today you would earn a total of 2,098 from holding CAR GROUP LIMITED or generate 102.24% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Staude Capital Global vs. CAR GROUP LIMITED
Performance |
| Timeline |
| Staude Capital Global |
| CAR GROUP LIMITED |
Staude Capital and CAR GROUP Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Staude Capital and CAR GROUP
The main advantage of trading using opposite Staude Capital and CAR GROUP positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Staude Capital position performs unexpectedly, CAR GROUP 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 CAR GROUP will offset losses from the drop in CAR GROUP's long position.| Staude Capital vs. Dug Technology | Staude Capital vs. The Environmental Group | Staude Capital vs. Ironbark Capital | Staude Capital vs. Legacy Iron Ore |
| CAR GROUP vs. The Environmental Group | CAR GROUP vs. Macquarie Technology Group | CAR GROUP vs. TTG Fintech | CAR GROUP vs. Spirit Telecom |
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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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