Correlation Between Newretail and Camellia Metal

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

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

Diversification Opportunities for Newretail and Camellia Metal

-0.83

Correlation Coefficient

Newretail  Camellia Metal

Pay attention - limited upside

The 3 months correlation between Newretail and Camellia is -0.83. Overlapping area represents the amount of risk that can be diversified away by holding Newretail Co and Camellia Metal Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Camellia Metal and Newretail 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 Newretail Co are associated (or correlated) with Camellia Metal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Camellia Metal has no effect on the direction of Newretail i.e., Newretail and Camellia Metal go up and down completely randomly.

Pair Corralation between Newretail and Camellia Metal

Assuming the 90 days trading horizon Newretail Co is expected to generate 3.07 times more return on investment than Camellia Metal. However, Newretail is 3.07 times more volatile than Camellia Metal Co. It trades about 0.03 of its potential returns per unit of risk. Camellia Metal Co is currently generating about -0.01 per unit of risk. If you would invest  2,210  in Newretail Co on October 5, 2024 and sell it today you would earn a total of  240.00  from holding Newretail Co or generate 10.86% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

Newretail Co  vs.  Camellia Metal Co

Newretail

Risk-Adjusted Performance

4 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Newretail Co are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, Newretail showed solid returns over the last few months and may actually be approaching a breakup point.

Camellia Metal

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Camellia Metal 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.

Pair Trading with Newretail and Camellia Metal

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

The idea behind Newretail Co and Camellia Metal 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 Money Managers module to screen money managers from public funds and ETFs managed around the world.