Correlation Between Carson Cumberbatch and HNB Finance

Can any of the company-specific risk be diversified away by investing in both Carson Cumberbatch and HNB Finance 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 Carson Cumberbatch and HNB Finance into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Carson Cumberbatch PLC and HNB Finance, you can compare the effects of market volatilities on Carson Cumberbatch and HNB Finance 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 Carson Cumberbatch with a short position of HNB Finance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Carson Cumberbatch and HNB Finance.

Diversification Opportunities for Carson Cumberbatch and HNB Finance

0.0

Correlation Coefficient

Carson Cumberbatch  HNB Finance

Pay attention - limited upside

The 3 months correlation between Carson and HNB is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Carson Cumberbatch PLC and HNB Finance in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HNB Finance and Carson Cumberbatch 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 Carson Cumberbatch PLC are associated (or correlated) with HNB Finance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HNB Finance has no effect on the direction of Carson Cumberbatch i.e., Carson Cumberbatch and HNB Finance go up and down completely randomly.

Pair Corralation between Carson Cumberbatch and HNB Finance

If you would invest  33,500  in Carson Cumberbatch PLC on September 16, 2024 and sell it today you would earn a total of  1,725  from holding Carson Cumberbatch PLC or generate 5.15% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Carson Cumberbatch PLC  vs.  HNB Finance

Carson Cumberbatch PLC

Risk-Adjusted Performance

18 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Carson Cumberbatch PLC are ranked lower than 18 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Carson Cumberbatch sustained solid returns over the last few months and may actually be approaching a breakup point.

HNB Finance

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days HNB Finance has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, HNB Finance is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Carson Cumberbatch and HNB Finance

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

The idea behind Carson Cumberbatch PLC and HNB Finance 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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.