Correlation Between C I and TRANS NATIONWIDE

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

Diversification Opportunities for C I and TRANS NATIONWIDE

-0.06

Correlation Coefficient

C I  TRANS NATIONWIDE

Good diversification

The 3 months correlation between CILEASING and TRANS is -0.06. Overlapping area represents the amount of risk that can be diversified away by holding C I LEASING and TRANS NATIONWIDE EXPRESS PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TRANS NATIONWIDE EXP 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 TRANS NATIONWIDE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TRANS NATIONWIDE EXP has no effect on the direction of C I i.e., C I and TRANS NATIONWIDE go up and down completely randomly.

Pair Corralation between C I and TRANS NATIONWIDE

Assuming the 90 days trading horizon C I is expected to generate 9.12 times less return on investment than TRANS NATIONWIDE. In addition to that, C I is 1.73 times more volatile than TRANS NATIONWIDE EXPRESS PLC. It trades about 0.02 of its total potential returns per unit of risk. TRANS NATIONWIDE EXPRESS PLC is currently generating about 0.26 per unit of volatility. If you would invest  138.00  in TRANS NATIONWIDE EXPRESS PLC on December 29, 2024 and sell it today you would earn a total of  62.00  from holding TRANS NATIONWIDE EXPRESS PLC or generate 44.93% return on investment over 90 days.

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

C I LEASING  vs.  TRANS NATIONWIDE EXPRESS PLC

C I LEASING

Risk-Adjusted Performance

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 recent stock price confusion, may contribute to short-horizon losses for the traders.

TRANS NATIONWIDE EXP

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in TRANS NATIONWIDE EXPRESS PLC are ranked lower than 20 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak basic indicators, TRANS NATIONWIDE showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with C I and TRANS NATIONWIDE

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

The idea behind C I LEASING and TRANS NATIONWIDE EXPRESS PLC 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.