Correlation Between City National and Value Line
Can any of the company-specific risk be diversified away by investing in both City National and Value Line 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 City National and Value Line into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between City National Rochdale and Value Line Larger, you can compare the effects of market volatilities on City National and Value Line 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 City National with a short position of Value Line. Check out your portfolio center. Please also check ongoing floating volatility patterns of City National and Value Line.
Diversification Opportunities for City National and Value Line
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between City and Value is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding City National Rochdale and Value Line Larger in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Value Line Larger and City National 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 City National Rochdale are associated (or correlated) with Value Line. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Value Line Larger has no effect on the direction of City National i.e., City National and Value Line go up and down completely randomly.
Pair Corralation between City National and Value Line
Assuming the 90 days horizon City National is expected to generate 30.2 times less return on investment than Value Line. But when comparing it to its historical volatility, City National Rochdale is 15.0 times less risky than Value Line. It trades about 0.11 of its potential returns per unit of risk. Value Line Larger is currently generating about 0.22 of returns per unit of risk over similar time horizon. If you would invest 3,637 in Value Line Larger on September 13, 2024 and sell it today you would earn a total of 461.00 from holding Value Line Larger or generate 12.68% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
City National Rochdale vs. Value Line Larger
Performance |
| Timeline |
| City National Rochdale |
| Value Line Larger |
City National and Value Line Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with City National and Value Line
The main advantage of trading using opposite City National and Value Line positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if City National position performs unexpectedly, Value Line 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 Value Line will offset losses from the drop in Value Line's long position.| City National vs. Deutsche Real Estate | City National vs. Short Real Estate | City National vs. Sa Real Estate | City National vs. Jhancock Real Estate |
| Value Line vs. Fidelity Capital Income | Value Line vs. Jpmorgan High Yield | Value Line vs. City National Rochdale | Value Line vs. Gmo High Yield |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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