Correlation Between Investcorp Credit and CBL Associates

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Can any of the company-specific risk be diversified away by investing in both Investcorp Credit and CBL Associates 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 Investcorp Credit and CBL Associates into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Investcorp Credit Management and CBL Associates Properties, you can compare the effects of market volatilities on Investcorp Credit and CBL Associates 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 Investcorp Credit with a short position of CBL Associates. Check out your portfolio center. Please also check ongoing floating volatility patterns of Investcorp Credit and CBL Associates.

Diversification Opportunities for Investcorp Credit and CBL Associates

0.22
  Correlation Coefficient

Modest diversification

The 3 months correlation between Investcorp and CBL is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding Investcorp Credit Management and CBL Associates Properties in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CBL Associates Properties and Investcorp Credit 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 Investcorp Credit Management are associated (or correlated) with CBL Associates. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CBL Associates Properties has no effect on the direction of Investcorp Credit i.e., Investcorp Credit and CBL Associates go up and down completely randomly.

Pair Corralation between Investcorp Credit and CBL Associates

Given the investment horizon of 90 days Investcorp Credit is expected to generate 5.05 times less return on investment than CBL Associates. In addition to that, Investcorp Credit is 1.41 times more volatile than CBL Associates Properties. It trades about 0.01 of its total potential returns per unit of risk. CBL Associates Properties is currently generating about 0.1 per unit of volatility. If you would invest  2,196  in CBL Associates Properties on August 26, 2024 and sell it today you would earn a total of  782.00  from holding CBL Associates Properties or generate 35.61% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthVery Weak
Accuracy100.0%
ValuesDaily Returns

Investcorp Credit Management  vs.  CBL Associates Properties

 Performance 
       Timeline  
Investcorp Credit 

Risk-Adjusted Performance

2 of 100

 
Weak
 
Strong
Weak
Compared to the overall equity markets, risk-adjusted returns on investments in Investcorp Credit Management are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong primary indicators, Investcorp Credit is not utilizing all of its potentials. The newest stock price disturbance, may contribute to short-term losses for the investors.
CBL Associates Properties 

Risk-Adjusted Performance

12 of 100

 
Weak
 
Strong
Good
Compared to the overall equity markets, risk-adjusted returns on investments in CBL Associates Properties are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite quite weak fundamental drivers, CBL Associates may actually be approaching a critical reversion point that can send shares even higher in December 2024.

Investcorp Credit and CBL Associates Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Investcorp Credit and CBL Associates

The main advantage of trading using opposite Investcorp Credit and CBL Associates positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Investcorp Credit position performs unexpectedly, CBL Associates 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 CBL Associates will offset losses from the drop in CBL Associates' long position.
The idea behind Investcorp Credit Management and CBL Associates Properties pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.

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