Correlation Between Weiss Korea and Chrysalis Investments
Can any of the company-specific risk be diversified away by investing in both Weiss Korea and Chrysalis Investments 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 Weiss Korea and Chrysalis Investments into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Weiss Korea Opportunity and Chrysalis Investments, you can compare the effects of market volatilities on Weiss Korea and Chrysalis Investments 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 Weiss Korea with a short position of Chrysalis Investments. Check out your portfolio center. Please also check ongoing floating volatility patterns of Weiss Korea and Chrysalis Investments.
Diversification Opportunities for Weiss Korea and Chrysalis Investments
-0.28 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Weiss and Chrysalis is -0.28. Overlapping area represents the amount of risk that can be diversified away by holding Weiss Korea Opportunity and Chrysalis Investments in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chrysalis Investments and Weiss Korea 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 Weiss Korea Opportunity are associated (or correlated) with Chrysalis Investments. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chrysalis Investments has no effect on the direction of Weiss Korea i.e., Weiss Korea and Chrysalis Investments go up and down completely randomly.
Pair Corralation between Weiss Korea and Chrysalis Investments
Assuming the 90 days trading horizon Weiss Korea is expected to generate 173.25 times less return on investment than Chrysalis Investments. But when comparing it to its historical volatility, Weiss Korea Opportunity is 3.57 times less risky than Chrysalis Investments. It trades about 0.0 of its potential returns per unit of risk. Chrysalis Investments is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 7,610 in Chrysalis Investments on August 26, 2024 and sell it today you would earn a total of 2,020 from holding Chrysalis Investments or generate 26.54% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.2% |
| Values | Daily Returns |
Weiss Korea Opportunity vs. Chrysalis Investments
Performance |
| Timeline |
| Weiss Korea Opportunity |
| Chrysalis Investments |
Weiss Korea and Chrysalis Investments Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Weiss Korea and Chrysalis Investments
The main advantage of trading using opposite Weiss Korea and Chrysalis Investments positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Weiss Korea position performs unexpectedly, Chrysalis Investments 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 Chrysalis Investments will offset losses from the drop in Chrysalis Investments' long position.| Weiss Korea vs. Catalyst Media Group | Weiss Korea vs. Oncimmune Holdings plc | Weiss Korea vs. Invesco Health Care | Weiss Korea vs. Coor Service Management |
| Chrysalis Investments vs. Catalyst Media Group | Chrysalis Investments vs. Oncimmune Holdings plc | Chrysalis Investments vs. Invesco Health Care | Chrysalis Investments vs. Coor Service Management |
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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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