Correlation Between C I and DEAP CAPITAL

Can any of the company-specific risk be diversified away by investing in both C I and DEAP 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 C I and DEAP CAPITAL into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between C I LEASING and DEAP CAPITAL MANAGEMENT, you can compare the effects of market volatilities on C I and DEAP 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 C I with a short position of DEAP CAPITAL. Check out your portfolio center. Please also check ongoing floating volatility patterns of C I and DEAP CAPITAL.

Diversification Opportunities for C I and DEAP CAPITAL

-0.51

Correlation Coefficient

C I  DEAP CAPITAL

Excellent diversification

The 3 months correlation between CILEASING and DEAP is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding C I LEASING and DEAP CAPITAL MANAGEMENT in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DEAP CAPITAL MANAGEMENT and C I 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 C I LEASING are associated (or correlated) with DEAP CAPITAL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DEAP CAPITAL MANAGEMENT has no effect on the direction of C I i.e., C I and DEAP CAPITAL go up and down completely randomly.

Pair Corralation between C I and DEAP CAPITAL

Assuming the 90 days trading horizon C I is expected to generate 4.17 times less return on investment than DEAP CAPITAL. But when comparing it to its historical volatility, C I LEASING is 1.28 times less risky than DEAP CAPITAL. It trades about 0.03 of its potential returns per unit of risk. DEAP CAPITAL MANAGEMENT is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest  20.00  in DEAP CAPITAL MANAGEMENT on September 13, 2024 and sell it today you would earn a total of  94.00  from holding DEAP CAPITAL MANAGEMENT or generate 470.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	83.95%
Values	Daily Returns

C I LEASING  vs.  DEAP CAPITAL MANAGEMENT

C I LEASING

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in C I LEASING are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite fairly strong basic indicators, C I is not utilizing all of its potentials. The current stock price confusion, may contribute to short-horizon losses for the traders.

DEAP CAPITAL MANAGEMENT

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in DEAP CAPITAL MANAGEMENT are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Even with relatively uncertain basic indicators, DEAP CAPITAL reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with C I and DEAP CAPITAL

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

The idea behind C I LEASING and DEAP CAPITAL MANAGEMENT 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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.