Correlation Between Commercial Vehicle and Cooper Stnd

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

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

Diversification Opportunities for Commercial Vehicle and Cooper Stnd

-0.41

Correlation Coefficient

Commercial Vehicle  Cooper Stnd

Very good diversification

The 3 months correlation between Commercial and Cooper is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding Commercial Vehicle Group and Cooper Stnd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cooper Stnd and Commercial Vehicle 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 Commercial Vehicle Group are associated (or correlated) with Cooper Stnd. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cooper Stnd has no effect on the direction of Commercial Vehicle i.e., Commercial Vehicle and Cooper Stnd go up and down completely randomly.

Pair Corralation between Commercial Vehicle and Cooper Stnd

Given the investment horizon of 90 days Commercial Vehicle Group is expected to under-perform the Cooper Stnd. In addition to that, Commercial Vehicle is 1.19 times more volatile than Cooper Stnd. It trades about -0.09 of its total potential returns per unit of risk. Cooper Stnd is currently generating about 0.04 per unit of volatility. If you would invest  1,462  in Cooper Stnd on September 2, 2024 and sell it today you would earn a total of  82.00  from holding Cooper Stnd or generate 5.61% return on investment over 90 days.

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

Commercial Vehicle Group  vs.  Cooper Stnd

Commercial Vehicle

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Commercial Vehicle Group has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's technical and fundamental indicators remain fairly strong which may send shares a bit higher in January 2025. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.

Cooper Stnd

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Cooper Stnd are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unfluctuating basic indicators, Cooper Stnd may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Commercial Vehicle and Cooper Stnd

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

The idea behind Commercial Vehicle Group and Cooper Stnd 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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.