Correlation Between CHRYSALIS INVESTMENTS and Sempra

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

Diversification Opportunities for CHRYSALIS INVESTMENTS and Sempra

0.37

Correlation Coefficient

CHRYSALIS INVESTMENTS  Sempra

Weak diversification

The 3 months correlation between CHRYSALIS and Sempra is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding CHRYSALIS INVESTMENTS LTD and Sempra in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sempra 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 Sempra. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sempra has no effect on the direction of CHRYSALIS INVESTMENTS i.e., CHRYSALIS INVESTMENTS and Sempra go up and down completely randomly.

Pair Corralation between CHRYSALIS INVESTMENTS and Sempra

Assuming the 90 days horizon CHRYSALIS INVESTMENTS LTD is expected to under-perform the Sempra. But the stock apears to be less risky and, when comparing its historical volatility, CHRYSALIS INVESTMENTS LTD is 1.41 times less risky than Sempra. The stock trades about -0.45 of its potential returns per unit of risk. The Sempra is currently generating about -0.02 of returns per unit of risk over similar time horizon. If you would invest  8,400  in Sempra on October 25, 2024 and sell it today you would lose (104.00) from holding Sempra or give up 1.24% of portfolio value over 90 days.

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

CHRYSALIS INVESTMENTS LTD  vs.  Sempra

CHRYSALIS INVESTMENTS LTD

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in CHRYSALIS INVESTMENTS LTD are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite nearly uncertain basic indicators, CHRYSALIS INVESTMENTS may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Sempra

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Sempra are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Sempra may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with CHRYSALIS INVESTMENTS and Sempra

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

The idea behind CHRYSALIS INVESTMENTS LTD and Sempra 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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.