Correlation Between Caldwell Partners and Ceres Global

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

By analyzing existing cross correlation between Caldwell Partners International and Ceres Global Ag, you can compare the effects of market volatilities on Caldwell Partners and Ceres Global 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 Caldwell Partners with a short position of Ceres Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Caldwell Partners and Ceres Global.

Diversification Opportunities for Caldwell Partners and Ceres Global

-0.29

Correlation Coefficient

Caldwell Partners  Ceres Global

Very good diversification

The 3 months correlation between Caldwell and Ceres is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding Caldwell Partners Internationa and Ceres Global Ag in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ceres Global Ag and Caldwell Partners 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 Caldwell Partners International are associated (or correlated) with Ceres Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ceres Global Ag has no effect on the direction of Caldwell Partners i.e., Caldwell Partners and Ceres Global go up and down completely randomly.

Pair Corralation between Caldwell Partners and Ceres Global

Assuming the 90 days trading horizon Caldwell Partners International is expected to generate 1.52 times more return on investment than Ceres Global. However, Caldwell Partners is 1.52 times more volatile than Ceres Global Ag. It trades about 0.05 of its potential returns per unit of risk. Ceres Global Ag is currently generating about 0.05 per unit of risk. If you would invest  105.00  in Caldwell Partners International on September 13, 2024 and sell it today you would earn a total of  8.00  from holding Caldwell Partners International or generate 7.62% return on investment over 90 days.

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

Caldwell Partners Internationa  vs.  Ceres Global Ag

Caldwell Partners

Risk-Adjusted Performance

4 of 100

Very Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Caldwell Partners International are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating essential indicators, Caldwell Partners may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Ceres Global Ag

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Ceres Global Ag are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy basic indicators, Ceres Global is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Caldwell Partners and Ceres Global

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

The idea behind Caldwell Partners International and Ceres Global Ag 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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.