Correlation Between Mapletree Industrial and Cumberland Pharmaceuticals
Can any of the company-specific risk be diversified away by investing in both Mapletree Industrial and Cumberland Pharmaceuticals 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 Mapletree Industrial and Cumberland Pharmaceuticals into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mapletree Industrial Trust and Cumberland Pharmaceuticals, you can compare the effects of market volatilities on Mapletree Industrial and Cumberland Pharmaceuticals 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 Mapletree Industrial with a short position of Cumberland Pharmaceuticals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mapletree Industrial and Cumberland Pharmaceuticals.
Diversification Opportunities for Mapletree Industrial and Cumberland Pharmaceuticals
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Mapletree and Cumberland is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Mapletree Industrial Trust and Cumberland Pharmaceuticals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cumberland Pharmaceuticals and Mapletree Industrial 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 Mapletree Industrial Trust are associated (or correlated) with Cumberland Pharmaceuticals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cumberland Pharmaceuticals has no effect on the direction of Mapletree Industrial i.e., Mapletree Industrial and Cumberland Pharmaceuticals go up and down completely randomly.
Pair Corralation between Mapletree Industrial and Cumberland Pharmaceuticals
If you would invest 112.00 in Cumberland Pharmaceuticals on September 1, 2024 and sell it today you would earn a total of 28.00 from holding Cumberland Pharmaceuticals or generate 25.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 4.76% |
| Values | Daily Returns |
Mapletree Industrial Trust vs. Cumberland Pharmaceuticals
Performance |
| Timeline |
| Mapletree Industrial |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Cumberland Pharmaceuticals |
Mapletree Industrial and Cumberland Pharmaceuticals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mapletree Industrial and Cumberland Pharmaceuticals
The main advantage of trading using opposite Mapletree Industrial and Cumberland Pharmaceuticals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mapletree Industrial position performs unexpectedly, Cumberland Pharmaceuticals 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 Cumberland Pharmaceuticals will offset losses from the drop in Cumberland Pharmaceuticals' long position.| Mapletree Industrial vs. Getty Images Holdings | Mapletree Industrial vs. Olympic Steel | Mapletree Industrial vs. Weibo Corp | Mapletree Industrial vs. Jeld Wen Holding |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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