Correlation Between Beeks TradingLtd and Chrysalis Investments

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

By analyzing existing cross correlation between Beeks Trading and Chrysalis Investments, you can compare the effects of market volatilities on Beeks TradingLtd and Chrysalis Investments 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 Beeks TradingLtd with a short position of Chrysalis Investments. Check out your portfolio center. Please also check ongoing floating volatility patterns of Beeks TradingLtd and Chrysalis Investments.

Diversification Opportunities for Beeks TradingLtd and Chrysalis Investments

0.58

Correlation Coefficient

Beeks TradingLtd  Chrysalis Investments

Very weak diversification

The 3 months correlation between Beeks and Chrysalis is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding Beeks Trading and Chrysalis Investments in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chrysalis Investments and Beeks TradingLtd 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 Beeks Trading are associated (or correlated) with Chrysalis Investments. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chrysalis Investments has no effect on the direction of Beeks TradingLtd i.e., Beeks TradingLtd and Chrysalis Investments go up and down completely randomly.

Pair Corralation between Beeks TradingLtd and Chrysalis Investments

Assuming the 90 days trading horizon Beeks Trading is expected to under-perform the Chrysalis Investments. In addition to that, Beeks TradingLtd is 2.61 times more volatile than Chrysalis Investments. It trades about -0.07 of its total potential returns per unit of risk. Chrysalis Investments is currently generating about -0.09 per unit of volatility. If you would invest  10,540  in Chrysalis Investments on December 23, 2024 and sell it today you would lose (1,010) from holding Chrysalis Investments or give up 9.58% of portfolio value over 90 days.

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

Beeks Trading  vs.  Chrysalis Investments

Beeks TradingLtd

Risk-Adjusted Performance

Very Weak

Over the last 90 days Beeks Trading has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's technical and fundamental indicators remain rather sound which may send shares a bit higher in April 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Chrysalis Investments

Risk-Adjusted Performance

Very Weak

Over the last 90 days Chrysalis Investments has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest uncertain performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Pair Trading with Beeks TradingLtd and Chrysalis Investments

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

The idea behind Beeks Trading and Chrysalis Investments 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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.