Correlation Between CKX Lands and Spindletop

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

By analyzing existing cross correlation between CKX Lands and Spindletop OG, you can compare the effects of market volatilities on CKX Lands and Spindletop 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 Spindletop. Check out your portfolio center. Please also check ongoing floating volatility patterns of CKX Lands and Spindletop.

Diversification Opportunities for CKX Lands and Spindletop

0.71

Correlation Coefficient

CKX Lands  Spindletop

Poor diversification

The 3 months correlation between CKX and Spindletop is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding CKX Lands and Spindletop OG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Spindletop OG 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 Spindletop. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Spindletop OG has no effect on the direction of CKX Lands i.e., CKX Lands and Spindletop go up and down completely randomly.

Pair Corralation between CKX Lands and Spindletop

Considering the 90-day investment horizon CKX Lands is expected to generate 0.25 times more return on investment than Spindletop. However, CKX Lands is 4.02 times less risky than Spindletop. It trades about -0.03 of its potential returns per unit of risk. Spindletop OG is currently generating about -0.16 per unit of risk. If you would invest  1,302  in CKX Lands on September 26, 2024 and sell it today you would lose (37.00) from holding CKX Lands or give up 2.84% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	92.86%
Values	Daily Returns

CKX Lands  vs.  Spindletop OG

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 unsteady 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.

Spindletop OG

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Spindletop OG has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of abnormal 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 Spindletop

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

The idea behind CKX Lands and Spindletop OG 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.