Correlation Between IMPERIAL TOBACCO and Chegg
Can any of the company-specific risk be diversified away by investing in both IMPERIAL TOBACCO and Chegg 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 IMPERIAL TOBACCO and Chegg into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between IMPERIAL TOBACCO and Chegg Inc, you can compare the effects of market volatilities on IMPERIAL TOBACCO and Chegg 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 IMPERIAL TOBACCO with a short position of Chegg. Check out your portfolio center. Please also check ongoing floating volatility patterns of IMPERIAL TOBACCO and Chegg.
Diversification Opportunities for IMPERIAL TOBACCO and Chegg
0.49 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between IMPERIAL and Chegg is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding IMPERIAL TOBACCO and Chegg Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chegg Inc and IMPERIAL TOBACCO 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 IMPERIAL TOBACCO are associated (or correlated) with Chegg. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chegg Inc has no effect on the direction of IMPERIAL TOBACCO i.e., IMPERIAL TOBACCO and Chegg go up and down completely randomly.
Pair Corralation between IMPERIAL TOBACCO and Chegg
Assuming the 90 days trading horizon IMPERIAL TOBACCO is expected to generate 0.13 times more return on investment than Chegg. However, IMPERIAL TOBACCO is 7.61 times less risky than Chegg. It trades about 0.03 of its potential returns per unit of risk. Chegg Inc is currently generating about -0.17 per unit of risk. If you would invest 3,097 in IMPERIAL TOBACCO on October 28, 2024 and sell it today you would earn a total of 20.00 from holding IMPERIAL TOBACCO or generate 0.65% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
IMPERIAL TOBACCO vs. Chegg Inc
Performance |
| Timeline |
| IMPERIAL TOBACCO |
| Chegg Inc |
IMPERIAL TOBACCO and Chegg Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IMPERIAL TOBACCO and Chegg
The main advantage of trading using opposite IMPERIAL TOBACCO and Chegg positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IMPERIAL TOBACCO position performs unexpectedly, Chegg 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 Chegg will offset losses from the drop in Chegg's long position.| IMPERIAL TOBACCO vs. Japan Post Insurance | IMPERIAL TOBACCO vs. VARIOUS EATERIES LS | IMPERIAL TOBACCO vs. Citic Telecom International | IMPERIAL TOBACCO vs. Singapore Telecommunications Limited |
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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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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