Correlation Between Special Opportunities and Cornerstone Strategic
Can any of the company-specific risk be diversified away by investing in both Special Opportunities and Cornerstone Strategic 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 Special Opportunities and Cornerstone Strategic into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Special Opportunities Closed and Cornerstone Strategic Return, you can compare the effects of market volatilities on Special Opportunities and Cornerstone Strategic 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 Special Opportunities with a short position of Cornerstone Strategic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Special Opportunities and Cornerstone Strategic.
Diversification Opportunities for Special Opportunities and Cornerstone Strategic
0.95 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Special and Cornerstone is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding Special Opportunities Closed and Cornerstone Strategic Return in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cornerstone Strategic and Special Opportunities 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 Special Opportunities Closed are associated (or correlated) with Cornerstone Strategic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cornerstone Strategic has no effect on the direction of Special Opportunities i.e., Special Opportunities and Cornerstone Strategic go up and down completely randomly.
Pair Corralation between Special Opportunities and Cornerstone Strategic
Considering the 90-day investment horizon Special Opportunities is expected to generate 1.78 times less return on investment than Cornerstone Strategic. But when comparing it to its historical volatility, Special Opportunities Closed is 1.15 times less risky than Cornerstone Strategic. It trades about 0.28 of its potential returns per unit of risk. Cornerstone Strategic Return is currently generating about 0.43 of returns per unit of risk over similar time horizon. If you would invest 778.00 in Cornerstone Strategic Return on August 28, 2024 and sell it today you would earn a total of 138.00 from holding Cornerstone Strategic Return or generate 17.74% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Special Opportunities Closed vs. Cornerstone Strategic Return
Performance |
| Timeline |
| Special Opportunities |
| Cornerstone Strategic |
Special Opportunities and Cornerstone Strategic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Special Opportunities and Cornerstone Strategic
The main advantage of trading using opposite Special Opportunities and Cornerstone Strategic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Special Opportunities position performs unexpectedly, Cornerstone Strategic 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 Cornerstone Strategic will offset losses from the drop in Cornerstone Strategic's long position.| Special Opportunities vs. Ares Dynamic Credit | Special Opportunities vs. Principal Real Estate | Special Opportunities vs. Tortoise Power And | Special Opportunities vs. Aquagold International |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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