Correlation Between Church Dwight and Awaysis Capital

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

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

Diversification Opportunities for Church Dwight and Awaysis Capital

0.11

Correlation Coefficient

Church Dwight  Awaysis Capital

Average diversification

The 3 months correlation between Church and Awaysis is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding Church Dwight and Awaysis Capital in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Awaysis Capital and Church Dwight 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 Church Dwight are associated (or correlated) with Awaysis Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Awaysis Capital has no effect on the direction of Church Dwight i.e., Church Dwight and Awaysis Capital go up and down completely randomly.

Pair Corralation between Church Dwight and Awaysis Capital

Considering the 90-day investment horizon Church Dwight is expected to generate 271.92 times less return on investment than Awaysis Capital. But when comparing it to its historical volatility, Church Dwight is 24.6 times less risky than Awaysis Capital. It trades about 0.01 of its potential returns per unit of risk. Awaysis Capital is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest  49.00  in Awaysis Capital on December 2, 2024 and sell it today you would lose (16.00) from holding Awaysis Capital or give up 32.65% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	98.39%
Values	Daily Returns

Church Dwight  vs.  Awaysis Capital

Church Dwight

Risk-Adjusted Performance

Very Weak

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

Awaysis Capital

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Awaysis Capital are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite somewhat uncertain fundamental indicators, Awaysis Capital sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Church Dwight and Awaysis Capital

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

The idea behind Church Dwight and Awaysis Capital 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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.