Correlation Between Park Electrochemical and Cadre Holdings
Can any of the company-specific risk be diversified away by investing in both Park Electrochemical and Cadre Holdings 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 Park Electrochemical and Cadre Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Park Electrochemical and Cadre Holdings, you can compare the effects of market volatilities on Park Electrochemical and Cadre Holdings 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 Park Electrochemical with a short position of Cadre Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Park Electrochemical and Cadre Holdings.
Diversification Opportunities for Park Electrochemical and Cadre Holdings
-0.32 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Park and Cadre is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding Park Electrochemical and Cadre Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cadre Holdings and Park Electrochemical 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 Park Electrochemical are associated (or correlated) with Cadre Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cadre Holdings has no effect on the direction of Park Electrochemical i.e., Park Electrochemical and Cadre Holdings go up and down completely randomly.
Pair Corralation between Park Electrochemical and Cadre Holdings
Considering the 90-day investment horizon Park Electrochemical is expected to generate 0.75 times more return on investment than Cadre Holdings. However, Park Electrochemical is 1.33 times less risky than Cadre Holdings. It trades about 0.08 of its potential returns per unit of risk. Cadre Holdings is currently generating about -0.19 per unit of risk. If you would invest 1,453 in Park Electrochemical on August 23, 2024 and sell it today you would earn a total of 50.00 from holding Park Electrochemical or generate 3.44% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Park Electrochemical vs. Cadre Holdings
Performance |
| Timeline |
| Park Electrochemical |
| Cadre Holdings |
Park Electrochemical and Cadre Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Park Electrochemical and Cadre Holdings
The main advantage of trading using opposite Park Electrochemical and Cadre Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Park Electrochemical position performs unexpectedly, Cadre Holdings 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 Cadre Holdings will offset losses from the drop in Cadre Holdings' long position.| Park Electrochemical vs. Small Cap Core | Park Electrochemical vs. Freedom Holding Corp | Park Electrochemical vs. Gfl Environmental Holdings | Park Electrochemical vs. Growth Fund Of |
| Cadre Holdings vs. European Wax Center | Cadre Holdings vs. Enfusion | Cadre Holdings vs. CiT Inc | Cadre Holdings vs. Core Main |
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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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