Correlation Between CAVELL TOURISTIC and CIM FINANCIAL

Can any of the company-specific risk be diversified away by investing in both CAVELL TOURISTIC and CIM FINANCIAL 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 CAVELL TOURISTIC and CIM FINANCIAL into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between CAVELL TOURISTIC INVESTMENTS and CIM FINANCIAL SERVICES, you can compare the effects of market volatilities on CAVELL TOURISTIC and CIM FINANCIAL 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 CAVELL TOURISTIC with a short position of CIM FINANCIAL. Check out your portfolio center. Please also check ongoing floating volatility patterns of CAVELL TOURISTIC and CIM FINANCIAL.

Diversification Opportunities for CAVELL TOURISTIC and CIM FINANCIAL

-0.54

Correlation Coefficient

CAVELL TOURISTIC  CIM FINANCIAL

Excellent diversification

The 3 months correlation between CAVELL and CIM is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding CAVELL TOURISTIC INVESTMENTS and CIM FINANCIAL SERVICES in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CIM FINANCIAL SERVICES and CAVELL TOURISTIC 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 CAVELL TOURISTIC INVESTMENTS are associated (or correlated) with CIM FINANCIAL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CIM FINANCIAL SERVICES has no effect on the direction of CAVELL TOURISTIC i.e., CAVELL TOURISTIC and CIM FINANCIAL go up and down completely randomly.

Pair Corralation between CAVELL TOURISTIC and CIM FINANCIAL

Assuming the 90 days trading horizon CAVELL TOURISTIC INVESTMENTS is expected to under-perform the CIM FINANCIAL. In addition to that, CAVELL TOURISTIC is 1.81 times more volatile than CIM FINANCIAL SERVICES. It trades about 0.0 of its total potential returns per unit of risk. CIM FINANCIAL SERVICES is currently generating about 0.15 per unit of volatility. If you would invest  1,400  in CIM FINANCIAL SERVICES on December 29, 2024 and sell it today you would earn a total of  200.00  from holding CIM FINANCIAL SERVICES or generate 14.29% return on investment over 90 days.

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

CAVELL TOURISTIC INVESTMENTS  vs.  CIM FINANCIAL SERVICES

CAVELL TOURISTIC INV

Risk-Adjusted Performance

Very Weak

Over the last 90 days CAVELL TOURISTIC INVESTMENTS has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound technical and fundamental indicators, CAVELL TOURISTIC is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

CIM FINANCIAL SERVICES

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in CIM FINANCIAL SERVICES are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of very unsteady primary indicators, CIM FINANCIAL displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with CAVELL TOURISTIC and CIM FINANCIAL

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

The idea behind CAVELL TOURISTIC INVESTMENTS and CIM FINANCIAL SERVICES 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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.