Correlation Between Continental Beverage and Interups

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

By analyzing existing cross correlation between Continental Beverage Brands and Interups, you can compare the effects of market volatilities on Continental Beverage and Interups 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 Continental Beverage with a short position of Interups. Check out your portfolio center. Please also check ongoing floating volatility patterns of Continental Beverage and Interups.

Diversification Opportunities for Continental Beverage and Interups

0.0

Correlation Coefficient

Continental Beverage  Interups

Pay attention - limited upside

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

Pair Corralation between Continental Beverage and Interups

If you would invest  0.01  in Interups on December 30, 2024 and sell it today you would earn a total of  0.00  from holding Interups or generate 0.0% return on investment over 90 days.

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

Continental Beverage Brands  vs.  Interups

Continental Beverage

Risk-Adjusted Performance

Very Weak

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

Interups

Risk-Adjusted Performance

Very Weak

Over the last 90 days Interups has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, Interups is not utilizing all of its potentials. The current stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with Continental Beverage and Interups

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

The idea behind Continental Beverage Brands and Interups 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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.