Correlation Between Calumet Specialty and Advisors Inner

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

By analyzing existing cross correlation between Calumet Specialty Products and Advisors Inner Circle, you can compare the effects of market volatilities on Calumet Specialty and Advisors Inner 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 Calumet Specialty with a short position of Advisors Inner. Check out your portfolio center. Please also check ongoing floating volatility patterns of Calumet Specialty and Advisors Inner.

Diversification Opportunities for Calumet Specialty and Advisors Inner

0.55

Correlation Coefficient

Calumet Specialty  Advisors Inner

Very weak diversification

The 3 months correlation between Calumet and Advisors is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding Calumet Specialty Products and Advisors Inner Circle in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Advisors Inner Circle and Calumet Specialty 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 Calumet Specialty Products are associated (or correlated) with Advisors Inner. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Advisors Inner Circle has no effect on the direction of Calumet Specialty i.e., Calumet Specialty and Advisors Inner go up and down completely randomly.

Pair Corralation between Calumet Specialty and Advisors Inner

Given the investment horizon of 90 days Calumet Specialty Products is expected to generate 7.36 times more return on investment than Advisors Inner. However, Calumet Specialty is 7.36 times more volatile than Advisors Inner Circle. It trades about 0.15 of its potential returns per unit of risk. Advisors Inner Circle is currently generating about 0.1 per unit of risk. If you would invest  1,658  in Calumet Specialty Products on September 12, 2024 and sell it today you would earn a total of  532.00  from holding Calumet Specialty Products or generate 32.09% return on investment over 90 days.

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

Calumet Specialty Products  vs.  Advisors Inner Circle

Calumet Specialty

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Calumet Specialty Products are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unfluctuating primary indicators, Calumet Specialty unveiled solid returns over the last few months and may actually be approaching a breakup point.

Advisors Inner Circle

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Advisors Inner Circle are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Even with relatively invariable basic indicators, Advisors Inner is not utilizing all of its potentials. The latest stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with Calumet Specialty and Advisors Inner

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

The idea behind Calumet Specialty Products and Advisors Inner Circle 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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.