Correlation Between Strickland Metals and Credit Corp
Can any of the company-specific risk be diversified away by investing in both Strickland Metals and Credit Corp 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 Strickland Metals and Credit Corp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Strickland Metals and Credit Corp Group, you can compare the effects of market volatilities on Strickland Metals and Credit Corp 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 Strickland Metals with a short position of Credit Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Strickland Metals and Credit Corp.
Diversification Opportunities for Strickland Metals and Credit Corp
0.29 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Strickland and Credit is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding Strickland Metals and Credit Corp Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Credit Corp Group and Strickland Metals 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 Strickland Metals are associated (or correlated) with Credit Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Credit Corp Group has no effect on the direction of Strickland Metals i.e., Strickland Metals and Credit Corp go up and down completely randomly.
Pair Corralation between Strickland Metals and Credit Corp
Assuming the 90 days trading horizon Strickland Metals is expected to under-perform the Credit Corp. But the stock apears to be less risky and, when comparing its historical volatility, Strickland Metals is 1.15 times less risky than Credit Corp. The stock trades about -0.2 of its potential returns per unit of risk. The Credit Corp Group is currently generating about -0.12 of returns per unit of risk over similar time horizon. If you would invest 1,736 in Credit Corp Group on November 28, 2024 and sell it today you would lose (158.00) from holding Credit Corp Group or give up 9.1% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Strickland Metals vs. Credit Corp Group
Performance |
| Timeline |
| Strickland Metals |
| Credit Corp Group |
Strickland Metals and Credit Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Strickland Metals and Credit Corp
The main advantage of trading using opposite Strickland Metals and Credit Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Strickland Metals position performs unexpectedly, Credit Corp 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 Credit Corp will offset losses from the drop in Credit Corp's long position.| Strickland Metals vs. National Storage REIT | Strickland Metals vs. ABACUS STORAGE KING | Strickland Metals vs. Black Rock Mining | Strickland Metals vs. Dalaroo Metals |
| Credit Corp vs. Westpac Banking | Credit Corp vs. TPG Telecom | Credit Corp vs. Computershare | Credit Corp vs. Treasury Wine Estates |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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