Correlation Between STORE ELECTRONIC and CHIBA BANK
Can any of the company-specific risk be diversified away by investing in both STORE ELECTRONIC and CHIBA BANK 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 STORE ELECTRONIC and CHIBA BANK into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between STORE ELECTRONIC and CHIBA BANK, you can compare the effects of market volatilities on STORE ELECTRONIC and CHIBA BANK 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 STORE ELECTRONIC with a short position of CHIBA BANK. Check out your portfolio center. Please also check ongoing floating volatility patterns of STORE ELECTRONIC and CHIBA BANK.
Diversification Opportunities for STORE ELECTRONIC and CHIBA BANK
-0.11 | Correlation Coefficient |
Good diversification
The 3 months correlation between STORE and CHIBA is -0.11. Overlapping area represents the amount of risk that can be diversified away by holding STORE ELECTRONIC and CHIBA BANK in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CHIBA BANK and STORE ELECTRONIC 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 STORE ELECTRONIC are associated (or correlated) with CHIBA BANK. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CHIBA BANK has no effect on the direction of STORE ELECTRONIC i.e., STORE ELECTRONIC and CHIBA BANK go up and down completely randomly.
Pair Corralation between STORE ELECTRONIC and CHIBA BANK
Assuming the 90 days trading horizon STORE ELECTRONIC is expected to generate 2.25 times more return on investment than CHIBA BANK. However, STORE ELECTRONIC is 2.25 times more volatile than CHIBA BANK. It trades about 0.11 of its potential returns per unit of risk. CHIBA BANK is currently generating about 0.24 per unit of risk. If you would invest 17,480 in STORE ELECTRONIC on November 30, 2024 and sell it today you would earn a total of 2,640 from holding STORE ELECTRONIC or generate 15.1% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
STORE ELECTRONIC vs. CHIBA BANK
Performance |
| Timeline |
| STORE ELECTRONIC |
| CHIBA BANK |
STORE ELECTRONIC and CHIBA BANK Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with STORE ELECTRONIC and CHIBA BANK
The main advantage of trading using opposite STORE ELECTRONIC and CHIBA BANK positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if STORE ELECTRONIC position performs unexpectedly, CHIBA BANK 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 CHIBA BANK will offset losses from the drop in CHIBA BANK's long position.| STORE ELECTRONIC vs. UNITED INTERNET N | STORE ELECTRONIC vs. Salesforce | STORE ELECTRONIC vs. Spirent Communications plc | STORE ELECTRONIC vs. Tradeweb Markets |
| CHIBA BANK vs. Gladstone Investment | CHIBA BANK vs. JLF INVESTMENT | CHIBA BANK vs. SLR Investment Corp | CHIBA BANK vs. Yunnan Water Investment |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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