Correlation Between Choo Bee and Sand Nisko

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

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

Diversification Opportunities for Choo Bee and Sand Nisko

0.71

Correlation Coefficient

Choo Bee  Sand Nisko

Poor diversification

The 3 months correlation between Choo and Sand is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Choo Bee Metal and Sand Nisko Capital in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sand Nisko Capital and Choo Bee 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 Choo Bee Metal are associated (or correlated) with Sand Nisko. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sand Nisko Capital has no effect on the direction of Choo Bee i.e., Choo Bee and Sand Nisko go up and down completely randomly.

Pair Corralation between Choo Bee and Sand Nisko

Assuming the 90 days trading horizon Choo Bee Metal is expected to under-perform the Sand Nisko. But the stock apears to be less risky and, when comparing its historical volatility, Choo Bee Metal is 3.22 times less risky than Sand Nisko. The stock trades about -0.16 of its potential returns per unit of risk. The Sand Nisko Capital is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest  11.00  in Sand Nisko Capital on September 25, 2024 and sell it today you would earn a total of  0.00  from holding Sand Nisko Capital or generate 0.0% return on investment over 90 days.

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

Choo Bee Metal  vs.  Sand Nisko Capital

Choo Bee Metal

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Choo Bee Metal has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest conflicting performance, the Stock's basic indicators remain persistent and the latest mess on Wall Street may also be a sign of long-standing gains for the company institutional investors.

Sand Nisko Capital

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Sand Nisko Capital are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting basic indicators, Sand Nisko disclosed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Choo Bee and Sand Nisko

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

The idea behind Choo Bee Metal and Sand Nisko Capital 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.