Correlation Between Litigation Capital and Chrysalis Investments
Can any of the company-specific risk be diversified away by investing in both Litigation Capital and Chrysalis Investments 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 Litigation Capital and Chrysalis Investments into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Litigation Capital Management and Chrysalis Investments, you can compare the effects of market volatilities on Litigation Capital and Chrysalis Investments 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 Litigation Capital with a short position of Chrysalis Investments. Check out your portfolio center. Please also check ongoing floating volatility patterns of Litigation Capital and Chrysalis Investments.
Diversification Opportunities for Litigation Capital and Chrysalis Investments
-0.54 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Litigation and Chrysalis is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding Litigation Capital Management and Chrysalis Investments in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chrysalis Investments and Litigation 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 Litigation Capital Management are associated (or correlated) with Chrysalis Investments. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chrysalis Investments has no effect on the direction of Litigation Capital i.e., Litigation Capital and Chrysalis Investments go up and down completely randomly.
Pair Corralation between Litigation Capital and Chrysalis Investments
Assuming the 90 days trading horizon Litigation Capital Management is expected to under-perform the Chrysalis Investments. In addition to that, Litigation Capital is 1.25 times more volatile than Chrysalis Investments. It trades about -0.4 of its total potential returns per unit of risk. Chrysalis Investments is currently generating about 0.31 per unit of volatility. If you would invest 9,670 in Chrysalis Investments on October 9, 2024 and sell it today you would earn a total of 830.00 from holding Chrysalis Investments or generate 8.58% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Litigation Capital Management vs. Chrysalis Investments
Performance |
| Timeline |
| Litigation Capital |
| Chrysalis Investments |
Litigation Capital and Chrysalis Investments Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Litigation Capital and Chrysalis Investments
The main advantage of trading using opposite Litigation Capital and Chrysalis Investments positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Litigation Capital position performs unexpectedly, Chrysalis Investments 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 Chrysalis Investments will offset losses from the drop in Chrysalis Investments' long position.| Litigation Capital vs. SupplyMe Capital PLC | Litigation Capital vs. SM Energy Co | Litigation Capital vs. FuelCell Energy | Litigation Capital vs. Grand Vision Media |
| Chrysalis Investments vs. SupplyMe Capital PLC | Chrysalis Investments vs. SM Energy Co | Chrysalis Investments vs. FuelCell Energy | Chrysalis Investments vs. Grand Vision Media |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
Other Complementary Tools
| Instant Ratings Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Bonds Directory Find actively traded corporate debentures issued by US companies | |
| Stock Tickers Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites | |
| Odds Of Bankruptcy Get analysis of equity chance of financial distress in the next 2 years | |
| Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing |