Correlation Between Chiba Bank and Greencore Group

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

By analyzing existing cross correlation between Chiba Bank Ltd and Greencore Group PLC, you can compare the effects of market volatilities on Chiba Bank and Greencore Group 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 Chiba Bank with a short position of Greencore Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chiba Bank and Greencore Group.

Diversification Opportunities for Chiba Bank and Greencore Group

0.0

Correlation Coefficient

Chiba Bank  Greencore Group

Pay attention - limited upside

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

Pair Corralation between Chiba Bank and Greencore Group

Assuming the 90 days horizon Chiba Bank is expected to generate 5.4 times less return on investment than Greencore Group. But when comparing it to its historical volatility, Chiba Bank Ltd is 1.09 times less risky than Greencore Group. It trades about 0.02 of its potential returns per unit of risk. Greencore Group PLC is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest  371.00  in Greencore Group PLC on October 15, 2024 and sell it today you would earn a total of  639.00  from holding Greencore Group PLC or generate 172.24% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Chiba Bank Ltd  vs.  Greencore Group PLC

Chiba Bank

Risk-Adjusted Performance

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Very Weak

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

Greencore Group PLC

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Greencore Group PLC has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong technical and fundamental indicators, Greencore Group is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Chiba Bank and Greencore Group

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

The idea behind Chiba Bank Ltd and Greencore Group PLC 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.