Correlation Between C I and INDUSTRIAL MEDICAL

Can any of the company-specific risk be diversified away by investing in both C I and INDUSTRIAL MEDICAL 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 INDUSTRIAL MEDICAL 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 INDUSTRIAL MEDICAL GASES, you can compare the effects of market volatilities on C I and INDUSTRIAL MEDICAL 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 INDUSTRIAL MEDICAL. Check out your portfolio center. Please also check ongoing floating volatility patterns of C I and INDUSTRIAL MEDICAL.

Diversification Opportunities for C I and INDUSTRIAL MEDICAL

0.48

Correlation Coefficient

C I  INDUSTRIAL MEDICAL

Very weak diversification

The 3 months correlation between CILEASING and INDUSTRIAL is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding C I LEASING and INDUSTRIAL MEDICAL GASES in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on INDUSTRIAL MEDICAL GASES 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 INDUSTRIAL MEDICAL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of INDUSTRIAL MEDICAL GASES has no effect on the direction of C I i.e., C I and INDUSTRIAL MEDICAL go up and down completely randomly.

Pair Corralation between C I and INDUSTRIAL MEDICAL

Assuming the 90 days trading horizon C I LEASING is expected to generate 3.75 times more return on investment than INDUSTRIAL MEDICAL. However, C I is 3.75 times more volatile than INDUSTRIAL MEDICAL GASES. It trades about 0.09 of its potential returns per unit of risk. INDUSTRIAL MEDICAL GASES is currently generating about 0.13 per unit of risk. If you would invest  370.00  in C I LEASING on October 23, 2024 and sell it today you would earn a total of  70.00  from holding C I LEASING or generate 18.92% return on investment over 90 days.

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

C I LEASING  vs.  INDUSTRIAL MEDICAL GASES

C I LEASING

Risk-Adjusted Performance

7 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in C I LEASING are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite fairly uncertain basic indicators, C I demonstrated solid returns over the last few months and may actually be approaching a breakup point.

INDUSTRIAL MEDICAL GASES

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in INDUSTRIAL MEDICAL GASES are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak basic indicators, INDUSTRIAL MEDICAL may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with C I and INDUSTRIAL MEDICAL

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

The idea behind C I LEASING and INDUSTRIAL MEDICAL GASES 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.