Correlation Between Four Leaf and Church Crawford

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Can any of the company-specific risk be diversified away by investing in both Four Leaf and Church Crawford 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 Four Leaf and Church Crawford into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Four Leaf Acquisition and Church Crawford, you can compare the effects of market volatilities on Four Leaf and Church Crawford 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 Four Leaf with a short position of Church Crawford. Check out your portfolio center. Please also check ongoing floating volatility patterns of Four Leaf and Church Crawford.

Diversification Opportunities for Four Leaf and Church Crawford

0.35
  Correlation Coefficient

Weak diversification

The 3 months correlation between Four and Church is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding Four Leaf Acquisition and Church Crawford in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Church Crawford and Four Leaf 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 Four Leaf Acquisition are associated (or correlated) with Church Crawford. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Church Crawford has no effect on the direction of Four Leaf i.e., Four Leaf and Church Crawford go up and down completely randomly.

Pair Corralation between Four Leaf and Church Crawford

Given the investment horizon of 90 days Four Leaf is expected to generate 44.58 times less return on investment than Church Crawford. But when comparing it to its historical volatility, Four Leaf Acquisition is 74.57 times less risky than Church Crawford. It trades about 0.09 of its potential returns per unit of risk. Church Crawford is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest  0.85  in Church Crawford on October 7, 2024 and sell it today you would lose (0.63) from holding Church Crawford or give up 74.12% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthVery Weak
Accuracy82.9%
ValuesDaily Returns

Four Leaf Acquisition  vs.  Church Crawford

 Performance 
       Timeline  
Four Leaf Acquisition 

Risk-Adjusted Performance

8 of 100

 
Weak
 
Strong
OK
Compared to the overall equity markets, risk-adjusted returns on investments in Four Leaf Acquisition are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite quite persistent basic indicators, Four Leaf is not utilizing all of its potentials. The newest stock price mess, may contribute to short-term losses for the institutional investors.
Church Crawford 

Risk-Adjusted Performance

7 of 100

 
Weak
 
Strong
OK
Compared to the overall equity markets, risk-adjusted returns on investments in Church Crawford are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Church Crawford reported solid returns over the last few months and may actually be approaching a breakup point.

Four Leaf and Church Crawford Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Four Leaf and Church Crawford

The main advantage of trading using opposite Four Leaf and Church Crawford positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Four Leaf position performs unexpectedly, Church Crawford 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 Church Crawford will offset losses from the drop in Church Crawford's long position.
The idea behind Four Leaf Acquisition and Church Crawford 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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..

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