Correlation Between S P and CP ALL
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By analyzing existing cross correlation between S P V and CP ALL Public, you can compare the effects of market volatilities on S P and CP ALL 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 S P with a short position of CP ALL. Check out your portfolio center. Please also check ongoing floating volatility patterns of S P and CP ALL.
Diversification Opportunities for S P and CP ALL
Modest diversification
The 3 months correlation between SPVI and CPALL-R is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding S P V and CP ALL Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CP ALL Public and S P 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 S P V are associated (or correlated) with CP ALL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CP ALL Public has no effect on the direction of S P i.e., S P and CP ALL go up and down completely randomly.
Pair Corralation between S P and CP ALL
Assuming the 90 days trading horizon S P V is expected to under-perform the CP ALL. In addition to that, S P is 2.44 times more volatile than CP ALL Public. It trades about -0.34 of its total potential returns per unit of risk. CP ALL Public is currently generating about -0.13 per unit of volatility. If you would invest 6,425 in CP ALL Public on August 29, 2024 and sell it today you would lose (200.00) from holding CP ALL Public or give up 3.11% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
S P V vs. CP ALL Public
Performance |
| Timeline |
| S P V |
| CP ALL Public |
S P and CP ALL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with S P and CP ALL
The main advantage of trading using opposite S P and CP ALL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if S P position performs unexpectedly, CP ALL 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 CP ALL will offset losses from the drop in CP ALL's long position.The idea behind S P V and CP ALL Public pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| CP ALL vs. S P V | CP ALL vs. Mega Lifesciences Public | CP ALL vs. TAC Consumer Public | CP ALL vs. Com7 PCL |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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