Correlation Between Grand Havana and Calbee

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

By analyzing existing cross correlation between Grand Havana and Calbee Inc, you can compare the effects of market volatilities on Grand Havana and Calbee 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 Grand Havana with a short position of Calbee. Check out your portfolio center. Please also check ongoing floating volatility patterns of Grand Havana and Calbee.

Diversification Opportunities for Grand Havana and Calbee

0.12

Correlation Coefficient

Grand Havana  Calbee

Average diversification

The 3 months correlation between Grand and Calbee is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding Grand Havana and Calbee Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Calbee Inc and Grand Havana 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 Grand Havana are associated (or correlated) with Calbee. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Calbee Inc has no effect on the direction of Grand Havana i.e., Grand Havana and Calbee go up and down completely randomly.

Pair Corralation between Grand Havana and Calbee

Given the investment horizon of 90 days Grand Havana is expected to under-perform the Calbee. In addition to that, Grand Havana is 4.23 times more volatile than Calbee Inc. It trades about -0.18 of its total potential returns per unit of risk. Calbee Inc is currently generating about -0.14 per unit of volatility. If you would invest  534.00  in Calbee Inc on October 5, 2024 and sell it today you would lose (26.00) from holding Calbee Inc or give up 4.87% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	95.24%
Values	Daily Returns

Grand Havana  vs.  Calbee Inc

Grand Havana

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Grand Havana has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, Grand Havana is not utilizing all of its potentials. The recent stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Calbee Inc

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Calbee Inc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest weak performance, the Stock's technical and fundamental indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Pair Trading with Grand Havana and Calbee

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

The idea behind Grand Havana and Calbee Inc 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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.