Correlation Between Pool and 22966RAE6
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By analyzing existing cross correlation between Pool Corporation and CUBESMART L P, you can compare the effects of market volatilities on Pool and 22966RAE6 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 Pool with a short position of 22966RAE6. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pool and 22966RAE6.
Diversification Opportunities for Pool and 22966RAE6
Very weak diversification
The 3 months correlation between Pool and 22966RAE6 is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding Pool Corp. and CUBESMART L P in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CUBESMART L P and Pool 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 Pool Corporation are associated (or correlated) with 22966RAE6. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CUBESMART L P has no effect on the direction of Pool i.e., Pool and 22966RAE6 go up and down completely randomly.
Pair Corralation between Pool and 22966RAE6
Given the investment horizon of 90 days Pool Corporation is expected to generate 1.2 times more return on investment than 22966RAE6. However, Pool is 1.2 times more volatile than CUBESMART L P. It trades about 0.13 of its potential returns per unit of risk. CUBESMART L P is currently generating about -0.26 per unit of risk. If you would invest 34,784 in Pool Corporation on October 23, 2024 and sell it today you would earn a total of 1,134 from holding Pool Corporation or generate 3.26% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 66.67% |
| Values | Daily Returns |
Pool Corp. vs. CUBESMART L P
Performance |
| Timeline |
| Pool |
| CUBESMART L P |
Pool and 22966RAE6 Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pool and 22966RAE6
The main advantage of trading using opposite Pool and 22966RAE6 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pool position performs unexpectedly, 22966RAE6 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 22966RAE6 will offset losses from the drop in 22966RAE6's long position.The idea behind Pool Corporation and CUBESMART L P pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| 22966RAE6 vs. Merit Medical Systems | 22966RAE6 vs. Catalyst Pharmaceuticals | 22966RAE6 vs. CF Industries Holdings | 22966RAE6 vs. Albemarle |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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