Correlation Between M Winkworth and Cardiff Property
Can any of the company-specific risk be diversified away by investing in both M Winkworth and Cardiff Property 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 M Winkworth and Cardiff Property into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between M Winkworth PLC and Cardiff Property PLC, you can compare the effects of market volatilities on M Winkworth and Cardiff Property 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 M Winkworth with a short position of Cardiff Property. Check out your portfolio center. Please also check ongoing floating volatility patterns of M Winkworth and Cardiff Property.
Diversification Opportunities for M Winkworth and Cardiff Property
0.19 | Correlation Coefficient |
Average diversification
The 3 months correlation between WINK and Cardiff is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding M Winkworth PLC and Cardiff Property PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cardiff Property PLC and M Winkworth 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 M Winkworth PLC are associated (or correlated) with Cardiff Property. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cardiff Property PLC has no effect on the direction of M Winkworth i.e., M Winkworth and Cardiff Property go up and down completely randomly.
Pair Corralation between M Winkworth and Cardiff Property
Assuming the 90 days trading horizon M Winkworth PLC is expected to generate 1.32 times more return on investment than Cardiff Property. However, M Winkworth is 1.32 times more volatile than Cardiff Property PLC. It trades about 0.32 of its potential returns per unit of risk. Cardiff Property PLC is currently generating about 0.37 per unit of risk. If you would invest 19,500 in M Winkworth PLC on October 21, 2024 and sell it today you would earn a total of 1,500 from holding M Winkworth PLC or generate 7.69% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
M Winkworth PLC vs. Cardiff Property PLC
Performance |
| Timeline |
| M Winkworth PLC |
| Cardiff Property PLC |
M Winkworth and Cardiff Property Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with M Winkworth and Cardiff Property
The main advantage of trading using opposite M Winkworth and Cardiff Property positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if M Winkworth position performs unexpectedly, Cardiff Property 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 Cardiff Property will offset losses from the drop in Cardiff Property's long position.| M Winkworth vs. St Galler Kantonalbank | M Winkworth vs. Manulife Financial Corp | M Winkworth vs. Centaur Media | M Winkworth vs. Sparebanken Vest |
| Cardiff Property vs. Derwent London PLC | Cardiff Property vs. Hammerson PLC | Cardiff Property vs. Supermarket Income REIT | Cardiff Property vs. Workspace Group PLC |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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