Correlation Between Dear Cashmere and Fastbase
Can any of the company-specific risk be diversified away by investing in both Dear Cashmere and Fastbase 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 Dear Cashmere and Fastbase into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dear Cashmere Holding and Fastbase, you can compare the effects of market volatilities on Dear Cashmere and Fastbase 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 Dear Cashmere with a short position of Fastbase. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dear Cashmere and Fastbase.
Diversification Opportunities for Dear Cashmere and Fastbase
-0.17 | Correlation Coefficient |
Good diversification
The 3 months correlation between Dear and Fastbase is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding Dear Cashmere Holding and Fastbase in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fastbase and Dear Cashmere 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 Dear Cashmere Holding are associated (or correlated) with Fastbase. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fastbase has no effect on the direction of Dear Cashmere i.e., Dear Cashmere and Fastbase go up and down completely randomly.
Pair Corralation between Dear Cashmere and Fastbase
Given the investment horizon of 90 days Dear Cashmere Holding is expected to under-perform the Fastbase. But the pink sheet apears to be less risky and, when comparing its historical volatility, Dear Cashmere Holding is 1.4 times less risky than Fastbase. The pink sheet trades about -0.25 of its potential returns per unit of risk. The Fastbase is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 150.00 in Fastbase on October 11, 2024 and sell it today you would lose (20.00) from holding Fastbase or give up 13.33% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Dear Cashmere Holding vs. Fastbase
Performance |
Timeline |
Dear Cashmere Holding |
Fastbase |
Dear Cashmere and Fastbase Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Dear Cashmere and Fastbase
The main advantage of trading using opposite Dear Cashmere and Fastbase positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dear Cashmere position performs unexpectedly, Fastbase 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 Fastbase will offset losses from the drop in Fastbase's long position.Dear Cashmere vs. One World Universe | Dear Cashmere vs. All American Pet | Dear Cashmere vs. Ilustrato Pictures | Dear Cashmere vs. Quality Industrial Corp |
Fastbase vs. GuestLogix | Fastbase vs. FlexiInternational Software | Fastbase vs. GA eXpress | Fastbase vs. GivBux Inc |
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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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