Correlation Between Makalot Industrial and Chailease Holding

Can any of the company-specific risk be diversified away by investing in both Makalot Industrial and Chailease Holding 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 Makalot Industrial and Chailease Holding into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Makalot Industrial Co and Chailease Holding Co, you can compare the effects of market volatilities on Makalot Industrial and Chailease Holding 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 Makalot Industrial with a short position of Chailease Holding. Check out your portfolio center. Please also check ongoing floating volatility patterns of Makalot Industrial and Chailease Holding.

Diversification Opportunities for Makalot Industrial and Chailease Holding

0.88

Correlation Coefficient

Makalot Industrial  Chailease Holding

Very poor diversification

The 3 months correlation between Makalot and Chailease is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Makalot Industrial Co and Chailease Holding Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chailease Holding and Makalot Industrial 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 Makalot Industrial Co are associated (or correlated) with Chailease Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chailease Holding has no effect on the direction of Makalot Industrial i.e., Makalot Industrial and Chailease Holding go up and down completely randomly.

Pair Corralation between Makalot Industrial and Chailease Holding

Assuming the 90 days trading horizon Makalot Industrial Co is expected to generate 1.13 times more return on investment than Chailease Holding. However, Makalot Industrial is 1.13 times more volatile than Chailease Holding Co. It trades about 0.04 of its potential returns per unit of risk. Chailease Holding Co is currently generating about -0.07 per unit of risk. If you would invest  23,050  in Makalot Industrial Co on September 29, 2024 and sell it today you would earn a total of  8,400  from holding Makalot Industrial Co or generate 36.44% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	99.59%
Values	Daily Returns

Makalot Industrial Co  vs.  Chailease Holding Co

Makalot Industrial

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Makalot Industrial Co has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest abnormal performance, the Stock's basic indicators remain stable and the latest fuss on Wall Street may also be a sign of long-term gains for the venture sophisticated investors.

Chailease Holding

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Chailease Holding Co has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of abnormal performance in the last few months, the Stock's basic indicators remain fairly stable which may send shares a bit higher in January 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

Pair Trading with Makalot Industrial and Chailease Holding

The main advantage of trading using opposite Makalot Industrial and Chailease Holding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Makalot Industrial position performs unexpectedly, Chailease Holding 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 Chailease Holding will offset losses from the drop in Chailease Holding's long position.

The idea behind Makalot Industrial Co and Chailease Holding Co 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.

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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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.