Correlation Between Charles Colvard and Movado

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

By analyzing existing cross correlation between Charles Colvard and Movado Group, you can compare the effects of market volatilities on Charles Colvard and Movado 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 Charles Colvard with a short position of Movado. Check out your portfolio center. Please also check ongoing floating volatility patterns of Charles Colvard and Movado.

Diversification Opportunities for Charles Colvard and Movado

0.75

Correlation Coefficient

Charles Colvard  Movado

Poor diversification

The 3 months correlation between Charles and Movado is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Charles Colvard and Movado Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Movado Group and Charles Colvard 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 Charles Colvard are associated (or correlated) with Movado. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Movado Group has no effect on the direction of Charles Colvard i.e., Charles Colvard and Movado go up and down completely randomly.

Pair Corralation between Charles Colvard and Movado

Given the investment horizon of 90 days Charles Colvard is expected to under-perform the Movado. In addition to that, Charles Colvard is 2.27 times more volatile than Movado Group. It trades about -0.1 of its total potential returns per unit of risk. Movado Group is currently generating about -0.11 per unit of volatility. If you would invest  1,960  in Movado Group on December 29, 2024 and sell it today you would lose (237.00) from holding Movado Group or give up 12.09% of portfolio value over 90 days.

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

Charles Colvard  vs.  Movado Group

Charles Colvard

Risk-Adjusted Performance

Very Weak

Over the last 90 days Charles Colvard has generated negative risk-adjusted returns adding no value to investors with long positions. Even with abnormal performance in the last few months, the Stock's technical indicators remain relatively invariable which may send shares a bit higher in April 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Movado Group

Risk-Adjusted Performance

Very Weak

Over the last 90 days Movado Group has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unsteady performance, the Stock's basic indicators remain stable and the latest fuss on Wall Street may also be a sign of long-term gains for the venture sophisticated investors.

Pair Trading with Charles Colvard and Movado

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

The idea behind Charles Colvard and Movado Group 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 Global Correlations module to find global opportunities by holding instruments from different markets.