Correlation Between Church Dwight and Trump Media

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

By analyzing existing cross correlation between Church Dwight and Trump Media Technology, you can compare the effects of market volatilities on Church Dwight and Trump Media 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 Trump Media. Check out your portfolio center. Please also check ongoing floating volatility patterns of Church Dwight and Trump Media.

Diversification Opportunities for Church Dwight and Trump Media

-0.46

Correlation Coefficient

Church Dwight  Trump Media

Very good diversification

The 3 months correlation between Church and Trump is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding Church Dwight and Trump Media Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Trump Media Technology 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 Trump Media. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Trump Media Technology has no effect on the direction of Church Dwight i.e., Church Dwight and Trump Media go up and down completely randomly.

Pair Corralation between Church Dwight and Trump Media

Considering the 90-day investment horizon Church Dwight is expected to generate 0.18 times more return on investment than Trump Media. However, Church Dwight is 5.7 times less risky than Trump Media. It trades about 0.01 of its potential returns per unit of risk. Trump Media Technology is currently generating about -0.11 per unit of risk. If you would invest  10,645  in Church Dwight on December 25, 2024 and sell it today you would earn a total of  45.00  from holding Church Dwight or generate 0.42% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Church Dwight  vs.  Trump Media Technology

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.

Trump Media Technology

Risk-Adjusted Performance

Very Weak

Over the last 90 days Trump Media Technology has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fragile performance in the last few months, the Stock's basic indicators remain fairly stable which may send shares a bit higher in April 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

Pair Trading with Church Dwight and Trump Media

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

The idea behind Church Dwight and Trump Media Technology 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.

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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.