Correlation Between Double Bond and Concord Securities
Can any of the company-specific risk be diversified away by investing in both Double Bond and Concord Securities 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 Double Bond and Concord Securities into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Double Bond Chemical and Concord Securities Co, you can compare the effects of market volatilities on Double Bond and Concord Securities 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 Double Bond with a short position of Concord Securities. Check out your portfolio center. Please also check ongoing floating volatility patterns of Double Bond and Concord Securities.
Diversification Opportunities for Double Bond and Concord Securities
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Double and Concord is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Double Bond Chemical and Concord Securities Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Concord Securities and Double Bond 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 Double Bond Chemical are associated (or correlated) with Concord Securities. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Concord Securities has no effect on the direction of Double Bond i.e., Double Bond and Concord Securities go up and down completely randomly.
Pair Corralation between Double Bond and Concord Securities
Assuming the 90 days trading horizon Double Bond Chemical is expected to generate 1.02 times more return on investment than Concord Securities. However, Double Bond is 1.02 times more volatile than Concord Securities Co. It trades about 0.16 of its potential returns per unit of risk. Concord Securities Co is currently generating about 0.14 per unit of risk. If you would invest 4,415 in Double Bond Chemical on November 23, 2024 and sell it today you would earn a total of 375.00 from holding Double Bond Chemical or generate 8.49% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
Double Bond Chemical vs. Concord Securities Co
Performance |
Timeline |
Double Bond Chemical |
Concord Securities |
Double Bond and Concord Securities Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Double Bond and Concord Securities
The main advantage of trading using opposite Double Bond and Concord Securities positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Double Bond position performs unexpectedly, Concord Securities 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 Concord Securities will offset losses from the drop in Concord Securities' long position.Double Bond vs. Jinan Acetate Chemical | ||
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Check out your portfolio center.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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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