Correlation Between Chemtrade Logistics and Primaris Retail

Can any of the company-specific risk be diversified away by investing in both Chemtrade Logistics and Primaris Retail 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 Chemtrade Logistics and Primaris Retail into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Chemtrade Logistics Income and Primaris Retail RE, you can compare the effects of market volatilities on Chemtrade Logistics and Primaris Retail 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 Chemtrade Logistics with a short position of Primaris Retail. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chemtrade Logistics and Primaris Retail.

Diversification Opportunities for Chemtrade Logistics and Primaris Retail

0.82

Correlation Coefficient

Chemtrade Logistics  Primaris Retail

Very poor diversification

The 3 months correlation between Chemtrade and Primaris is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Chemtrade Logistics Income and Primaris Retail RE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Primaris Retail RE and Chemtrade Logistics 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 Chemtrade Logistics Income are associated (or correlated) with Primaris Retail. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Primaris Retail RE has no effect on the direction of Chemtrade Logistics i.e., Chemtrade Logistics and Primaris Retail go up and down completely randomly.

Pair Corralation between Chemtrade Logistics and Primaris Retail

Assuming the 90 days trading horizon Chemtrade Logistics Income is expected to generate 1.65 times more return on investment than Primaris Retail. However, Chemtrade Logistics is 1.65 times more volatile than Primaris Retail RE. It trades about -0.16 of its potential returns per unit of risk. Primaris Retail RE is currently generating about -0.39 per unit of risk. If you would invest  1,086  in Chemtrade Logistics Income on October 22, 2024 and sell it today you would lose (48.00) from holding Chemtrade Logistics Income or give up 4.42% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	100.0%
Values	Daily Returns

Chemtrade Logistics Income  vs.  Primaris Retail RE

Chemtrade Logistics

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Chemtrade Logistics Income has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong technical and fundamental indicators, Chemtrade Logistics is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

Primaris Retail RE

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Primaris Retail RE has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest uncertain performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Pair Trading with Chemtrade Logistics and Primaris Retail

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

The idea behind Chemtrade Logistics Income and Primaris Retail RE 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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.