Correlation Between Trematon Capital and Bowler Metcalf
Can any of the company-specific risk be diversified away by investing in both Trematon Capital and Bowler Metcalf 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 Trematon Capital and Bowler Metcalf into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Trematon Capital Investments and Bowler Metcalf, you can compare the effects of market volatilities on Trematon Capital and Bowler Metcalf 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 Trematon Capital with a short position of Bowler Metcalf. Check out your portfolio center. Please also check ongoing floating volatility patterns of Trematon Capital and Bowler Metcalf.
Diversification Opportunities for Trematon Capital and Bowler Metcalf
0.16 | Correlation Coefficient |
Average diversification
The 3 months correlation between Trematon and Bowler is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding Trematon Capital Investments and Bowler Metcalf in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bowler Metcalf and Trematon Capital 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 Trematon Capital Investments are associated (or correlated) with Bowler Metcalf. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bowler Metcalf has no effect on the direction of Trematon Capital i.e., Trematon Capital and Bowler Metcalf go up and down completely randomly.
Pair Corralation between Trematon Capital and Bowler Metcalf
Assuming the 90 days trading horizon Trematon Capital is expected to generate 3.1 times less return on investment than Bowler Metcalf. But when comparing it to its historical volatility, Trematon Capital Investments is 1.11 times less risky than Bowler Metcalf. It trades about 0.02 of its potential returns per unit of risk. Bowler Metcalf is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 83,500 in Bowler Metcalf on August 31, 2024 and sell it today you would earn a total of 46,500 from holding Bowler Metcalf or generate 55.69% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Trematon Capital Investments vs. Bowler Metcalf
Performance |
| Timeline |
| Trematon Capital Inv |
| Bowler Metcalf |
Trematon Capital and Bowler Metcalf Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Trematon Capital and Bowler Metcalf
The main advantage of trading using opposite Trematon Capital and Bowler Metcalf positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Trematon Capital position performs unexpectedly, Bowler Metcalf 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 Bowler Metcalf will offset losses from the drop in Bowler Metcalf's long position.| Trematon Capital vs. Afine Investments | Trematon Capital vs. African Media Entertainment | Trematon Capital vs. Life Healthcare | Trematon Capital vs. HomeChoice Investments |
| Bowler Metcalf vs. Trematon Capital Investments | Bowler Metcalf vs. African Media Entertainment | Bowler Metcalf vs. Astoria Investments | Bowler Metcalf vs. Hosken Consolidated Investments |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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