Correlation Between Chestnut Street and Cref Money
Can any of the company-specific risk be diversified away by investing in both Chestnut Street and Cref Money 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 Chestnut Street and Cref Money into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Chestnut Street Exchange and Cref Money Market, you can compare the effects of market volatilities on Chestnut Street and Cref Money 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 Chestnut Street with a short position of Cref Money. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chestnut Street and Cref Money.
Diversification Opportunities for Chestnut Street and Cref Money
0.07 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Chestnut and Cref is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding Chestnut Street Exchange and Cref Money Market in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cref Money Market and Chestnut Street 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 Chestnut Street Exchange are associated (or correlated) with Cref Money. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cref Money Market has no effect on the direction of Chestnut Street i.e., Chestnut Street and Cref Money go up and down completely randomly.
Pair Corralation between Chestnut Street and Cref Money
Assuming the 90 days horizon Chestnut Street Exchange is expected to under-perform the Cref Money. In addition to that, Chestnut Street is 35.58 times more volatile than Cref Money Market. It trades about -0.17 of its total potential returns per unit of risk. Cref Money Market is currently generating about 0.93 per unit of volatility. If you would invest 2,993 in Cref Money Market on December 1, 2024 and sell it today you would earn a total of 10.00 from holding Cref Money Market or generate 0.33% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Chestnut Street Exchange vs. Cref Money Market
Performance |
Timeline |
Chestnut Street Exchange |
Cref Money Market |
Chestnut Street and Cref Money Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Chestnut Street and Cref Money
The main advantage of trading using opposite Chestnut Street and Cref Money positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chestnut Street position performs unexpectedly, Cref Money 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 Cref Money will offset losses from the drop in Cref Money's long position.Chestnut Street vs. Us Government Securities | Chestnut Street vs. Us Government Securities | Chestnut Street vs. Aig Government Money | Chestnut Street vs. Virtus Seix Government |
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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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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