Correlation Between Mind Gym and Caffyns PLC
Can any of the company-specific risk be diversified away by investing in both Mind Gym and Caffyns PLC 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 Mind Gym and Caffyns PLC into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mind Gym and Caffyns PLC, you can compare the effects of market volatilities on Mind Gym and Caffyns PLC 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 Mind Gym with a short position of Caffyns PLC. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mind Gym and Caffyns PLC.
Diversification Opportunities for Mind Gym and Caffyns PLC
-0.07 | Correlation Coefficient |
Good diversification
The 3 months correlation between Mind and Caffyns is -0.07. Overlapping area represents the amount of risk that can be diversified away by holding Mind Gym and Caffyns PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Caffyns PLC and Mind Gym 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 Mind Gym are associated (or correlated) with Caffyns PLC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Caffyns PLC has no effect on the direction of Mind Gym i.e., Mind Gym and Caffyns PLC go up and down completely randomly.
Pair Corralation between Mind Gym and Caffyns PLC
Assuming the 90 days trading horizon Mind Gym is expected to generate 0.9 times more return on investment than Caffyns PLC. However, Mind Gym is 1.11 times less risky than Caffyns PLC. It trades about -0.21 of its potential returns per unit of risk. Caffyns PLC is currently generating about -0.21 per unit of risk. If you would invest 2,000 in Mind Gym on August 30, 2024 and sell it today you would lose (100.00) from holding Mind Gym or give up 5.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mind Gym vs. Caffyns PLC
Performance |
| Timeline |
| Mind Gym |
| Caffyns PLC |
Mind Gym and Caffyns PLC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mind Gym and Caffyns PLC
The main advantage of trading using opposite Mind Gym and Caffyns PLC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mind Gym position performs unexpectedly, Caffyns PLC 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 Caffyns PLC will offset losses from the drop in Caffyns PLC's long position.| Mind Gym vs. Ecclesiastical Insurance Office | Mind Gym vs. UNIQA Insurance Group | Mind Gym vs. Endeavour Mining Corp | Mind Gym vs. Direct Line Insurance |
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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 Stocks Directory module to find actively traded stocks across global markets.
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