Correlation Between Partner Communications and Cantaloupe
Can any of the company-specific risk be diversified away by investing in both Partner Communications and Cantaloupe 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 Partner Communications and Cantaloupe into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Partner Communications and Cantaloupe, you can compare the effects of market volatilities on Partner Communications and Cantaloupe 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 Partner Communications with a short position of Cantaloupe. Check out your portfolio center. Please also check ongoing floating volatility patterns of Partner Communications and Cantaloupe.
Diversification Opportunities for Partner Communications and Cantaloupe
0.54 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Partner and Cantaloupe is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding Partner Communications and Cantaloupe in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cantaloupe and Partner Communications 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 Partner Communications are associated (or correlated) with Cantaloupe. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cantaloupe has no effect on the direction of Partner Communications i.e., Partner Communications and Cantaloupe go up and down completely randomly.
Pair Corralation between Partner Communications and Cantaloupe
Assuming the 90 days horizon Partner Communications is expected to generate 1.44 times more return on investment than Cantaloupe. However, Partner Communications is 1.44 times more volatile than Cantaloupe. It trades about 0.03 of its potential returns per unit of risk. Cantaloupe is currently generating about 0.03 per unit of risk. If you would invest 462.00 in Partner Communications on September 12, 2024 and sell it today you would earn a total of 38.00 from holding Partner Communications or generate 8.23% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 62.22% |
| Values | Daily Returns |
Partner Communications vs. Cantaloupe
Performance |
| Timeline |
| Partner Communications |
| Cantaloupe |
Partner Communications and Cantaloupe Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Partner Communications and Cantaloupe
The main advantage of trading using opposite Partner Communications and Cantaloupe positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Partner Communications position performs unexpectedly, Cantaloupe 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 Cantaloupe will offset losses from the drop in Cantaloupe's long position.| Partner Communications vs. MGIC Investment Corp | Partner Communications vs. Under Armour C | Partner Communications vs. Ralph Lauren Corp | Partner Communications vs. Nike Inc |
| Cantaloupe vs. FiscalNote Holdings | Cantaloupe vs. CLPS Inc | Cantaloupe vs. Formula Systems 1985 | Cantaloupe vs. CSP Inc |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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