Correlation Between Cadre Holdings and Woodward
Can any of the company-specific risk be diversified away by investing in both Cadre Holdings and Woodward 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 Cadre Holdings and Woodward into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cadre Holdings and Woodward, you can compare the effects of market volatilities on Cadre Holdings and Woodward 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 Cadre Holdings with a short position of Woodward. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cadre Holdings and Woodward.
Diversification Opportunities for Cadre Holdings and Woodward
0.39 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Cadre and Woodward is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding Cadre Holdings and Woodward in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Woodward and Cadre Holdings 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 Cadre Holdings are associated (or correlated) with Woodward. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Woodward has no effect on the direction of Cadre Holdings i.e., Cadre Holdings and Woodward go up and down completely randomly.
Pair Corralation between Cadre Holdings and Woodward
Given the investment horizon of 90 days Cadre Holdings is expected to under-perform the Woodward. In addition to that, Cadre Holdings is 1.31 times more volatile than Woodward. It trades about -0.06 of its total potential returns per unit of risk. Woodward is currently generating about 0.09 per unit of volatility. If you would invest 16,788 in Woodward on December 28, 2024 and sell it today you would earn a total of 1,541 from holding Woodward or generate 9.18% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Cadre Holdings vs. Woodward
Performance |
Timeline |
Cadre Holdings |
Woodward |
Cadre Holdings and Woodward Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Cadre Holdings and Woodward
The main advantage of trading using opposite Cadre Holdings and Woodward positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cadre Holdings position performs unexpectedly, Woodward 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 Woodward will offset losses from the drop in Woodward's long position.Cadre Holdings vs. European Wax Center | Cadre Holdings vs. Enfusion | Cadre Holdings vs. CiT Inc | Cadre Holdings vs. Core Main |
Woodward vs. Hexcel | Woodward vs. Ducommun Incorporated | Woodward vs. Mercury Systems | Woodward vs. AAR Corp |
Check out your portfolio center.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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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