Correlation Between Kasten and Church Crawford
Can any of the company-specific risk be diversified away by investing in both Kasten and Church Crawford 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 Kasten and Church Crawford into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kasten Inc and Church Crawford, you can compare the effects of market volatilities on Kasten and Church Crawford 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 Kasten with a short position of Church Crawford. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kasten and Church Crawford.
Diversification Opportunities for Kasten and Church Crawford
-0.25 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Kasten and Church is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding Kasten Inc and Church Crawford in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Church Crawford and Kasten 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 Kasten Inc are associated (or correlated) with Church Crawford. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Church Crawford has no effect on the direction of Kasten i.e., Kasten and Church Crawford go up and down completely randomly.
Pair Corralation between Kasten and Church Crawford
Given the investment horizon of 90 days Kasten is expected to generate 2.15 times less return on investment than Church Crawford. But when comparing it to its historical volatility, Kasten Inc is 1.2 times less risky than Church Crawford. It trades about 0.03 of its potential returns per unit of risk. Church Crawford is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 0.19 in Church Crawford on September 12, 2024 and sell it today you would lose (0.05) from holding Church Crawford or give up 26.32% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kasten Inc vs. Church Crawford
Performance |
| Timeline |
| Kasten Inc |
| Church Crawford |
Kasten and Church Crawford Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kasten and Church Crawford
The main advantage of trading using opposite Kasten and Church Crawford positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kasten position performs unexpectedly, Church Crawford 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 Church Crawford will offset losses from the drop in Church Crawford's long position.| Kasten vs. Interups | Kasten vs. Church Crawford | Kasten vs. Active Health Foods | Kasten vs. Gold Ent Group |
| Church Crawford vs. Oncologix Tech | Church Crawford vs. JPX Global | Church Crawford vs. Profitable Develop | Church Crawford vs. Coastal Capital Acq |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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