Correlation Between Minco Capital and CBLT
Can any of the company-specific risk be diversified away by investing in both Minco Capital and CBLT 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 Minco Capital and CBLT into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Minco Capital Corp and CBLT Inc, you can compare the effects of market volatilities on Minco Capital and CBLT 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 Minco Capital with a short position of CBLT. Check out your portfolio center. Please also check ongoing floating volatility patterns of Minco Capital and CBLT.
Diversification Opportunities for Minco Capital and CBLT
0.17 | Correlation Coefficient |
Average diversification
The 3 months correlation between Minco and CBLT is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding Minco Capital Corp and CBLT Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CBLT Inc and Minco 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 Minco Capital Corp are associated (or correlated) with CBLT. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CBLT Inc has no effect on the direction of Minco Capital i.e., Minco Capital and CBLT go up and down completely randomly.
Pair Corralation between Minco Capital and CBLT
Assuming the 90 days horizon Minco Capital is expected to generate 1.13 times less return on investment than CBLT. But when comparing it to its historical volatility, Minco Capital Corp is 3.32 times less risky than CBLT. It trades about 0.22 of its potential returns per unit of risk. CBLT Inc is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 1.50 in CBLT Inc on December 9, 2024 and sell it today you would earn a total of 0.00 from holding CBLT Inc or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Minco Capital Corp vs. CBLT Inc
Performance |
| Timeline |
| Minco Capital Corp |
| CBLT Inc |
Minco Capital and CBLT Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Minco Capital and CBLT
The main advantage of trading using opposite Minco Capital and CBLT positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Minco Capital position performs unexpectedly, CBLT 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 CBLT will offset losses from the drop in CBLT's long position.| Minco Capital vs. Gfl Environmental Holdings | ||
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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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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