Correlation Between Cref Money and Chestnut Street
Can any of the company-specific risk be diversified away by investing in both Cref Money and Chestnut Street 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 Cref Money and Chestnut Street into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cref Money Market and Chestnut Street Exchange, you can compare the effects of market volatilities on Cref Money and Chestnut Street 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 Cref Money with a short position of Chestnut Street. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cref Money and Chestnut Street.
Diversification Opportunities for Cref Money and Chestnut Street
-0.06 | Correlation Coefficient |
Good diversification
The 3 months correlation between Cref and Chestnut is -0.06. Overlapping area represents the amount of risk that can be diversified away by holding Cref Money Market and Chestnut Street Exchange in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chestnut Street Exchange and Cref Money 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 Cref Money Market are associated (or correlated) with Chestnut Street. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chestnut Street Exchange has no effect on the direction of Cref Money i.e., Cref Money and Chestnut Street go up and down completely randomly.
Pair Corralation between Cref Money and Chestnut Street
Assuming the 90 days trading horizon Cref Money is expected to generate 2.82 times less return on investment than Chestnut Street. But when comparing it to its historical volatility, Cref Money Market is 35.06 times less risky than Chestnut Street. It trades about 0.98 of its potential returns per unit of risk. Chestnut Street Exchange is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 105,007 in Chestnut Street Exchange on November 21, 2024 and sell it today you would earn a total of 13,115 from holding Chestnut Street Exchange or generate 12.49% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Cref Money Market vs. Chestnut Street Exchange
Performance |
Timeline |
Cref Money Market |
Chestnut Street Exchange |
Cref Money and Chestnut Street Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Cref Money and Chestnut Street
The main advantage of trading using opposite Cref Money and Chestnut Street positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cref Money position performs unexpectedly, Chestnut Street 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 Chestnut Street will offset losses from the drop in Chestnut Street's long position.Cref Money vs. Fbanjx | ||
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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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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