Correlation Between Bank Central and Creek Road
Can any of the company-specific risk be diversified away by investing in both Bank Central and Creek Road 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 Bank Central and Creek Road into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bank Central Asia and Creek Road Miners, you can compare the effects of market volatilities on Bank Central and Creek Road 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 Bank Central with a short position of Creek Road. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank Central and Creek Road.
Diversification Opportunities for Bank Central and Creek Road
-0.63 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Bank and Creek is -0.63. Overlapping area represents the amount of risk that can be diversified away by holding Bank Central Asia and Creek Road Miners in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Creek Road Miners and Bank Central 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 Bank Central Asia are associated (or correlated) with Creek Road. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Creek Road Miners has no effect on the direction of Bank Central i.e., Bank Central and Creek Road go up and down completely randomly.
Pair Corralation between Bank Central and Creek Road
Assuming the 90 days horizon Bank Central is expected to generate 46.46 times less return on investment than Creek Road. But when comparing it to its historical volatility, Bank Central Asia is 14.25 times less risky than Creek Road. It trades about 0.04 of its potential returns per unit of risk. Creek Road Miners is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 11.00 in Creek Road Miners on August 30, 2024 and sell it today you would earn a total of 12.00 from holding Creek Road Miners or generate 109.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 31.31% |
| Values | Daily Returns |
Bank Central Asia vs. Creek Road Miners
Performance |
| Timeline |
| Bank Central Asia |
| Creek Road Miners |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Bank Central and Creek Road Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank Central and Creek Road
The main advantage of trading using opposite Bank Central and Creek Road positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank Central position performs unexpectedly, Creek Road 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 Creek Road will offset losses from the drop in Creek Road's long position.| Bank Central vs. Israel Discount Bank | Bank Central vs. Baraboo Bancorporation | Bank Central vs. Danske Bank AS | Bank Central vs. Jyske Bank AS |
| Creek Road vs. Cryomass Technologies | Creek Road vs. Global Helium Corp | Creek Road vs. Optimi Health Corp | Creek Road vs. Draganfly |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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