Correlation Between 3M and Coastal Caribbean
Can any of the company-specific risk be diversified away by investing in both 3M and Coastal Caribbean 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 3M and Coastal Caribbean into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between 3M Company and Coastal Caribbean Oils, you can compare the effects of market volatilities on 3M and Coastal Caribbean 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 3M with a short position of Coastal Caribbean. Check out your portfolio center. Please also check ongoing floating volatility patterns of 3M and Coastal Caribbean.
Diversification Opportunities for 3M and Coastal Caribbean
-0.28 | Correlation Coefficient |
Very good diversification
The 3 months correlation between 3M and Coastal is -0.28. Overlapping area represents the amount of risk that can be diversified away by holding 3M Company and Coastal Caribbean Oils in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Coastal Caribbean Oils and 3M 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 3M Company are associated (or correlated) with Coastal Caribbean. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Coastal Caribbean Oils has no effect on the direction of 3M i.e., 3M and Coastal Caribbean go up and down completely randomly.
Pair Corralation between 3M and Coastal Caribbean
If you would invest 12,960 in 3M Company on August 28, 2024 and sell it today you would earn a total of 72.00 from holding 3M Company or generate 0.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 4.76% |
| Values | Daily Returns |
3M Company vs. Coastal Caribbean Oils
Performance |
| Timeline |
| 3M Company |
| Coastal Caribbean Oils |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
3M and Coastal Caribbean Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with 3M and Coastal Caribbean
The main advantage of trading using opposite 3M and Coastal Caribbean positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if 3M position performs unexpectedly, Coastal Caribbean 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 Coastal Caribbean will offset losses from the drop in Coastal Caribbean's long position.| 3M vs. MDU Resources Group | 3M vs. Valmont Industries | 3M vs. Griffon | 3M vs. Compass Diversified Holdings |
| Coastal Caribbean vs. Strat Petroleum | Coastal Caribbean vs. Imperial Res | Coastal Caribbean vs. Century Petroleum Corp |
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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
Other Complementary Tools
| Share Portfolio Track or share privately all of your investments from the convenience of any device | |
| Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital | |
| Stocks Directory Find actively traded stocks across global markets | |
| Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges | |
| Transaction History View history of all your transactions and understand their impact on performance |