Correlation Between Spencers Retail and Cambridge Technology
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By analyzing existing cross correlation between Spencers Retail Limited and Cambridge Technology Enterprises, you can compare the effects of market volatilities on Spencers Retail and Cambridge Technology 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 Spencers Retail with a short position of Cambridge Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Spencers Retail and Cambridge Technology.
Diversification Opportunities for Spencers Retail and Cambridge Technology
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Spencers and Cambridge is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Spencers Retail Limited and Cambridge Technology Enterpris in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cambridge Technology and Spencers Retail 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 Spencers Retail Limited are associated (or correlated) with Cambridge Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cambridge Technology has no effect on the direction of Spencers Retail i.e., Spencers Retail and Cambridge Technology go up and down completely randomly.
Pair Corralation between Spencers Retail and Cambridge Technology
Assuming the 90 days trading horizon Spencers Retail Limited is expected to under-perform the Cambridge Technology. But the stock apears to be less risky and, when comparing its historical volatility, Spencers Retail Limited is 1.07 times less risky than Cambridge Technology. The stock trades about -0.2 of its potential returns per unit of risk. The Cambridge Technology Enterprises is currently generating about -0.12 of returns per unit of risk over similar time horizon. If you would invest 9,594 in Cambridge Technology Enterprises on September 2, 2024 and sell it today you would lose (583.00) from holding Cambridge Technology Enterprises or give up 6.08% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Spencers Retail Limited vs. Cambridge Technology Enterpris
Performance |
| Timeline |
| Spencers Retail |
| Cambridge Technology |
Spencers Retail and Cambridge Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Spencers Retail and Cambridge Technology
The main advantage of trading using opposite Spencers Retail and Cambridge Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Spencers Retail position performs unexpectedly, Cambridge Technology 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 Cambridge Technology will offset losses from the drop in Cambridge Technology's long position.| Spencers Retail vs. Kingfa Science Technology | Spencers Retail vs. Rico Auto Industries | Spencers Retail vs. GACM Technologies Limited | Spencers Retail vs. COSMO FIRST LIMITED |
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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