Correlation Between CDL INVESTMENT and Brockhaus Capital

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Can any of the company-specific risk be diversified away by investing in both CDL INVESTMENT and Brockhaus Capital 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 CDL INVESTMENT and Brockhaus Capital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CDL INVESTMENT and Brockhaus Capital Management, you can compare the effects of market volatilities on CDL INVESTMENT and Brockhaus Capital 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 CDL INVESTMENT with a short position of Brockhaus Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of CDL INVESTMENT and Brockhaus Capital.

Diversification Opportunities for CDL INVESTMENT and Brockhaus Capital

-0.26
  Correlation Coefficient

Very good diversification

The 3 months correlation between CDL and Brockhaus is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding CDL INVESTMENT and Brockhaus Capital Management in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Brockhaus Capital and CDL INVESTMENT 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 CDL INVESTMENT are associated (or correlated) with Brockhaus Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Brockhaus Capital has no effect on the direction of CDL INVESTMENT i.e., CDL INVESTMENT and Brockhaus Capital go up and down completely randomly.

Pair Corralation between CDL INVESTMENT and Brockhaus Capital

Assuming the 90 days trading horizon CDL INVESTMENT is expected to generate 0.63 times more return on investment than Brockhaus Capital. However, CDL INVESTMENT is 1.6 times less risky than Brockhaus Capital. It trades about 0.16 of its potential returns per unit of risk. Brockhaus Capital Management is currently generating about 0.0 per unit of risk. If you would invest  40.00  in CDL INVESTMENT on October 6, 2024 and sell it today you would earn a total of  4.00  from holding CDL INVESTMENT or generate 10.0% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

CDL INVESTMENT  vs.  Brockhaus Capital Management

 Performance 
       Timeline  
CDL INVESTMENT 

Risk-Adjusted Performance

3 of 100

 
Weak
 
Strong
Insignificant
Compared to the overall equity markets, risk-adjusted returns on investments in CDL INVESTMENT are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound basic indicators, CDL INVESTMENT is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.
Brockhaus Capital 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Brockhaus Capital Management has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's technical indicators remain nearly stable which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

CDL INVESTMENT and Brockhaus Capital Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with CDL INVESTMENT and Brockhaus Capital

The main advantage of trading using opposite CDL INVESTMENT and Brockhaus Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CDL INVESTMENT position performs unexpectedly, Brockhaus Capital 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 Brockhaus Capital will offset losses from the drop in Brockhaus Capital's long position.
The idea behind CDL INVESTMENT and Brockhaus Capital Management 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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.

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