Correlation Between Caravelle International and Matson
Can any of the company-specific risk be diversified away by investing in both Caravelle International and Matson 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 Caravelle International and Matson into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Caravelle International Group and Matson Inc, you can compare the effects of market volatilities on Caravelle International and Matson 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 Caravelle International with a short position of Matson. Check out your portfolio center. Please also check ongoing floating volatility patterns of Caravelle International and Matson.
Diversification Opportunities for Caravelle International and Matson
-0.57 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Caravelle and Matson is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding Caravelle International Group and Matson Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Matson Inc and Caravelle International 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 Caravelle International Group are associated (or correlated) with Matson. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Matson Inc has no effect on the direction of Caravelle International i.e., Caravelle International and Matson go up and down completely randomly.
Pair Corralation between Caravelle International and Matson
Given the investment horizon of 90 days Caravelle International Group is expected to under-perform the Matson. In addition to that, Caravelle International is 7.11 times more volatile than Matson Inc. It trades about -0.01 of its total potential returns per unit of risk. Matson Inc is currently generating about 0.19 per unit of volatility. If you would invest 13,484 in Matson Inc on November 1, 2024 and sell it today you would earn a total of 718.00 from holding Matson Inc or generate 5.32% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Caravelle International Group vs. Matson Inc
Performance |
| Timeline |
| Caravelle International |
| Matson Inc |
Caravelle International and Matson Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Caravelle International and Matson
The main advantage of trading using opposite Caravelle International and Matson positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Caravelle International position performs unexpectedly, Matson 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 Matson will offset losses from the drop in Matson's long position.| Caravelle International vs. Saia Inc | Caravelle International vs. TFI International | Caravelle International vs. Western Digital | Caravelle International vs. Arrow Electronics |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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