Correlation Between Timken and California Engels
Can any of the company-specific risk be diversified away by investing in both Timken and California Engels 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 Timken and California Engels into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Timken Company and California Engels Mining, you can compare the effects of market volatilities on Timken and California Engels 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 Timken with a short position of California Engels. Check out your portfolio center. Please also check ongoing floating volatility patterns of Timken and California Engels.
Diversification Opportunities for Timken and California Engels
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Timken and California is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Timken Company and California Engels Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on California Engels Mining and Timken 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 Timken Company are associated (or correlated) with California Engels. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of California Engels Mining has no effect on the direction of Timken i.e., Timken and California Engels go up and down completely randomly.
Pair Corralation between Timken and California Engels
If you would invest 7,617 in Timken Company on September 12, 2024 and sell it today you would earn a total of 147.00 from holding Timken Company or generate 1.93% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Timken Company vs. California Engels Mining
Performance |
| Timeline |
| Timken Company |
| California Engels Mining |
Timken and California Engels Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Timken and California Engels
The main advantage of trading using opposite Timken and California Engels positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Timken position performs unexpectedly, California Engels 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 California Engels will offset losses from the drop in California Engels' long position.The idea behind Timken Company and California Engels Mining 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.| California Engels vs. Grocery Outlet Holding | California Engels vs. Mind Medicine | California Engels vs. Centessa Pharmaceuticals PLC | California Engels vs. Sellas Life Sciences |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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