Correlation Between Oak Woods and CNDB Old
Can any of the company-specific risk be diversified away by investing in both Oak Woods and CNDB Old 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 Oak Woods and CNDB Old into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Oak Woods Acquisition and CNDB Old, you can compare the effects of market volatilities on Oak Woods and CNDB Old 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 Oak Woods with a short position of CNDB Old. Check out your portfolio center. Please also check ongoing floating volatility patterns of Oak Woods and CNDB Old.
Diversification Opportunities for Oak Woods and CNDB Old
Significant diversification
The 3 months correlation between Oak and CNDB is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding Oak Woods Acquisition and CNDB Old in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CNDB Old and Oak Woods 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 Oak Woods Acquisition are associated (or correlated) with CNDB Old. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CNDB Old has no effect on the direction of Oak Woods i.e., Oak Woods and CNDB Old go up and down completely randomly.
Pair Corralation between Oak Woods and CNDB Old
Assuming the 90 days horizon Oak Woods Acquisition is expected to generate 8.66 times more return on investment than CNDB Old. However, Oak Woods is 8.66 times more volatile than CNDB Old. It trades about 0.05 of its potential returns per unit of risk. CNDB Old is currently generating about 0.11 per unit of risk. If you would invest 1,000.00 in Oak Woods Acquisition on November 2, 2024 and sell it today you would earn a total of 161.00 from holding Oak Woods Acquisition or generate 16.1% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Insignificant |
Accuracy | 23.77% |
Values | Daily Returns |
Oak Woods Acquisition vs. CNDB Old
Performance |
Timeline |
Oak Woods Acquisition |
CNDB Old |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Oak Woods and CNDB Old Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Oak Woods and CNDB Old
The main advantage of trading using opposite Oak Woods and CNDB Old positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Oak Woods position performs unexpectedly, CNDB Old 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 CNDB Old will offset losses from the drop in CNDB Old's long position.Oak Woods vs. Summit Hotel Properties | Oak Woods vs. Canaf Investments | Oak Woods vs. AA Mission Acquisition | Oak Woods vs. Futuretech II Acquisition |
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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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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