Correlation Between Caldwell Partners and TrueBlue

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

By analyzing existing cross correlation between The Caldwell Partners and TrueBlue, you can compare the effects of market volatilities on Caldwell Partners and TrueBlue 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 TrueBlue. Check out your portfolio center. Please also check ongoing floating volatility patterns of Caldwell Partners and TrueBlue.

Diversification Opportunities for Caldwell Partners and TrueBlue

0.19

Correlation Coefficient

Caldwell Partners  TrueBlue

Average diversification

The 3 months correlation between Caldwell and TrueBlue is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding The Caldwell Partners and TrueBlue in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TrueBlue 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 The Caldwell Partners are associated (or correlated) with TrueBlue. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TrueBlue has no effect on the direction of Caldwell Partners i.e., Caldwell Partners and TrueBlue go up and down completely randomly.

Pair Corralation between Caldwell Partners and TrueBlue

Assuming the 90 days horizon The Caldwell Partners is expected to generate 0.95 times more return on investment than TrueBlue. However, The Caldwell Partners is 1.06 times less risky than TrueBlue. It trades about 0.01 of its potential returns per unit of risk. TrueBlue is currently generating about 0.0 per unit of risk. If you would invest  80.00  in The Caldwell Partners on August 31, 2024 and sell it today you would lose (1.00) from holding The Caldwell Partners or give up 1.25% of portfolio value over 90 days.

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

The Caldwell Partners  vs.  TrueBlue

Caldwell Partners

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days The Caldwell Partners has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Caldwell Partners is not utilizing all of its potentials. The latest stock price disturbance, may contribute to mid-run losses for the stockholders.

TrueBlue

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days TrueBlue has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong fundamental drivers, TrueBlue is not utilizing all of its potentials. The recent stock price confusion, may contribute to short-horizon losses for the traders.

Pair Trading with Caldwell Partners and TrueBlue

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

The idea behind The Caldwell Partners and TrueBlue 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.