Correlation Between CKX Lands and Lead Real

Can any of the company-specific risk be diversified away by investing in both CKX Lands and Lead Real 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 CKX Lands and Lead Real into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between CKX Lands and Lead Real Estate, you can compare the effects of market volatilities on CKX Lands and Lead Real 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 CKX Lands with a short position of Lead Real. Check out your portfolio center. Please also check ongoing floating volatility patterns of CKX Lands and Lead Real.

Diversification Opportunities for CKX Lands and Lead Real

-0.81

Correlation Coefficient

CKX Lands  Lead Real

Pay attention - limited upside

The 3 months correlation between CKX and Lead is -0.81. Overlapping area represents the amount of risk that can be diversified away by holding CKX Lands and Lead Real Estate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lead Real Estate and CKX Lands 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 CKX Lands are associated (or correlated) with Lead Real. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lead Real Estate has no effect on the direction of CKX Lands i.e., CKX Lands and Lead Real go up and down completely randomly.

Pair Corralation between CKX Lands and Lead Real

Considering the 90-day investment horizon CKX Lands is expected to generate 0.11 times more return on investment than Lead Real. However, CKX Lands is 9.33 times less risky than Lead Real. It trades about 0.13 of its potential returns per unit of risk. Lead Real Estate is currently generating about -0.22 per unit of risk. If you would invest  1,190  in CKX Lands on September 24, 2024 and sell it today you would earn a total of  68.00  from holding CKX Lands or generate 5.71% return on investment over 90 days.

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

CKX Lands  vs.  Lead Real Estate

CKX Lands

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days CKX Lands has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest fragile performance, the Stock's forward-looking signals remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Lead Real Estate

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Lead Real Estate has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Stock's basic indicators remain rather sound which may send shares a bit higher in January 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Pair Trading with CKX Lands and Lead Real

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

The idea behind CKX Lands and Lead Real Estate 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.

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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.