Correlation Between CHRYSALIS INVESTMENTS and FIRST SAVINGS

Can any of the company-specific risk be diversified away by investing in both CHRYSALIS INVESTMENTS and FIRST SAVINGS 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 CHRYSALIS INVESTMENTS and FIRST SAVINGS into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between CHRYSALIS INVESTMENTS LTD and FIRST SAVINGS FINL, you can compare the effects of market volatilities on CHRYSALIS INVESTMENTS and FIRST SAVINGS 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 CHRYSALIS INVESTMENTS with a short position of FIRST SAVINGS. Check out your portfolio center. Please also check ongoing floating volatility patterns of CHRYSALIS INVESTMENTS and FIRST SAVINGS.

Diversification Opportunities for CHRYSALIS INVESTMENTS and FIRST SAVINGS

0.33

Correlation Coefficient

CHRYSALIS INVESTMENTS  FIRST SAVINGS

Weak diversification

The 3 months correlation between CHRYSALIS and FIRST is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding CHRYSALIS INVESTMENTS LTD and FIRST SAVINGS FINL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FIRST SAVINGS FINL and CHRYSALIS INVESTMENTS 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 CHRYSALIS INVESTMENTS LTD are associated (or correlated) with FIRST SAVINGS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FIRST SAVINGS FINL has no effect on the direction of CHRYSALIS INVESTMENTS i.e., CHRYSALIS INVESTMENTS and FIRST SAVINGS go up and down completely randomly.

Pair Corralation between CHRYSALIS INVESTMENTS and FIRST SAVINGS

Assuming the 90 days horizon CHRYSALIS INVESTMENTS LTD is expected to generate 0.54 times more return on investment than FIRST SAVINGS. However, CHRYSALIS INVESTMENTS LTD is 1.87 times less risky than FIRST SAVINGS. It trades about 0.3 of its potential returns per unit of risk. FIRST SAVINGS FINL is currently generating about 0.0 per unit of risk. If you would invest  105.00  in CHRYSALIS INVESTMENTS LTD on October 9, 2024 and sell it today you would earn a total of  21.00  from holding CHRYSALIS INVESTMENTS LTD or generate 20.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

CHRYSALIS INVESTMENTS LTD  vs.  FIRST SAVINGS FINL

CHRYSALIS INVESTMENTS LTD

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in CHRYSALIS INVESTMENTS LTD are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite nearly uncertain basic indicators, CHRYSALIS INVESTMENTS reported solid returns over the last few months and may actually be approaching a breakup point.

FIRST SAVINGS FINL

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in FIRST SAVINGS FINL are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, FIRST SAVINGS reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with CHRYSALIS INVESTMENTS and FIRST SAVINGS

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

The idea behind CHRYSALIS INVESTMENTS LTD and FIRST SAVINGS FINL 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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.