Correlation Between Chailease Holding and Dynapack International

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

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

Diversification Opportunities for Chailease Holding and Dynapack International

-0.35

Correlation Coefficient

Chailease Holding  Dynapack International

Very good diversification

The 3 months correlation between Chailease and Dynapack is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding Chailease Holding Co and Dynapack International Technol in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dynapack International and Chailease Holding 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 Chailease Holding Co are associated (or correlated) with Dynapack International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dynapack International has no effect on the direction of Chailease Holding i.e., Chailease Holding and Dynapack International go up and down completely randomly.

Pair Corralation between Chailease Holding and Dynapack International

Assuming the 90 days trading horizon Chailease Holding Co is expected to generate 0.51 times more return on investment than Dynapack International. However, Chailease Holding Co is 1.95 times less risky than Dynapack International. It trades about 0.11 of its potential returns per unit of risk. Dynapack International Technology is currently generating about -0.03 per unit of risk. If you would invest  11,100  in Chailease Holding Co on December 25, 2024 and sell it today you would earn a total of  1,200  from holding Chailease Holding Co or generate 10.81% return on investment over 90 days.

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

Chailease Holding Co  vs.  Dynapack International Technol

Chailease Holding

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Chailease Holding Co are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, Chailease Holding showed solid returns over the last few months and may actually be approaching a breakup point.

Dynapack International

Risk-Adjusted Performance

Very Weak

Over the last 90 days Dynapack International Technology has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, Dynapack International is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pair Trading with Chailease Holding and Dynapack International

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

The idea behind Chailease Holding Co and Dynapack International Technology 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.