Correlation Between Cadiz Depositary and Harbor Custom

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

By analyzing existing cross correlation between Cadiz Depositary Shares and Harbor Custom Development, you can compare the effects of market volatilities on Cadiz Depositary and Harbor Custom 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 Cadiz Depositary with a short position of Harbor Custom. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cadiz Depositary and Harbor Custom.

Diversification Opportunities for Cadiz Depositary and Harbor Custom

0.57

Correlation Coefficient

Cadiz Depositary  Harbor Custom

Very weak diversification

The 3 months correlation between Cadiz and Harbor is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding Cadiz Depositary Shares and Harbor Custom Development in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Harbor Custom Development and Cadiz Depositary 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 Cadiz Depositary Shares are associated (or correlated) with Harbor Custom. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Harbor Custom Development has no effect on the direction of Cadiz Depositary i.e., Cadiz Depositary and Harbor Custom go up and down completely randomly.

Pair Corralation between Cadiz Depositary and Harbor Custom

If you would invest  1,262  in Cadiz Depositary Shares on October 22, 2024 and sell it today you would earn a total of  578.00  from holding Cadiz Depositary Shares or generate 45.8% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	0.44%
Values	Daily Returns

Cadiz Depositary Shares  vs.  Harbor Custom Development

Cadiz Depositary Shares

Risk-Adjusted Performance

27 of 100

Strong

Compared to the overall equity markets, risk-adjusted returns on investments in Cadiz Depositary Shares are ranked lower than 27 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak forward indicators, Cadiz Depositary reported solid returns over the last few months and may actually be approaching a breakup point.

Harbor Custom Development

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Cadiz Depositary and Harbor Custom

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

The idea behind Cadiz Depositary Shares and Harbor Custom Development 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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.