Correlation Between CHRYSALIS INVESTMENTS and Traton SE

Can any of the company-specific risk be diversified away by investing in both CHRYSALIS INVESTMENTS and Traton SE 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 Traton SE 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 Traton SE, you can compare the effects of market volatilities on CHRYSALIS INVESTMENTS and Traton SE 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 Traton SE. Check out your portfolio center. Please also check ongoing floating volatility patterns of CHRYSALIS INVESTMENTS and Traton SE.

Diversification Opportunities for CHRYSALIS INVESTMENTS and Traton SE

-0.54

Correlation Coefficient

CHRYSALIS INVESTMENTS  Traton SE

Excellent diversification

The 3 months correlation between CHRYSALIS and Traton is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding CHRYSALIS INVESTMENTS LTD and Traton SE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Traton SE 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 Traton SE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Traton SE has no effect on the direction of CHRYSALIS INVESTMENTS i.e., CHRYSALIS INVESTMENTS and Traton SE go up and down completely randomly.

Pair Corralation between CHRYSALIS INVESTMENTS and Traton SE

Assuming the 90 days horizon CHRYSALIS INVESTMENTS is expected to generate 1.81 times less return on investment than Traton SE. In addition to that, CHRYSALIS INVESTMENTS is 1.41 times more volatile than Traton SE. It trades about 0.03 of its total potential returns per unit of risk. Traton SE is currently generating about 0.08 per unit of volatility. If you would invest  1,476  in Traton SE on October 11, 2024 and sell it today you would earn a total of  1,434  from holding Traton SE or generate 97.15% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	99.8%
Values	Daily Returns

CHRYSALIS INVESTMENTS LTD  vs.  Traton SE

CHRYSALIS INVESTMENTS LTD

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in CHRYSALIS INVESTMENTS LTD are ranked lower than 10 (%) 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.

Traton SE

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Traton SE are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, Traton SE is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with CHRYSALIS INVESTMENTS and Traton SE

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

The idea behind CHRYSALIS INVESTMENTS LTD and Traton SE 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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.