Correlation Between Cshg Logistica and LIFE CAPITAL

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

By analyzing existing cross correlation between Cshg Logistica and LIFE CAPITAL PARTNERS, you can compare the effects of market volatilities on Cshg Logistica and LIFE CAPITAL 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 Cshg Logistica with a short position of LIFE CAPITAL. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cshg Logistica and LIFE CAPITAL.

Diversification Opportunities for Cshg Logistica and LIFE CAPITAL

0.22

Correlation Coefficient

Cshg Logistica  LIFE CAPITAL

Modest diversification

The 3 months correlation between Cshg and LIFE is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding Cshg Logistica and LIFE CAPITAL PARTNERS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LIFE CAPITAL PARTNERS and Cshg Logistica 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 Cshg Logistica are associated (or correlated) with LIFE CAPITAL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LIFE CAPITAL PARTNERS has no effect on the direction of Cshg Logistica i.e., Cshg Logistica and LIFE CAPITAL go up and down completely randomly.

Pair Corralation between Cshg Logistica and LIFE CAPITAL

Assuming the 90 days trading horizon Cshg Logistica is expected to under-perform the LIFE CAPITAL. But the fund apears to be less risky and, when comparing its historical volatility, Cshg Logistica is 3.77 times less risky than LIFE CAPITAL. The fund trades about -0.02 of its potential returns per unit of risk. The LIFE CAPITAL PARTNERS is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  839.00  in LIFE CAPITAL PARTNERS on December 30, 2024 and sell it today you would earn a total of  45.00  from holding LIFE CAPITAL PARTNERS or generate 5.36% return on investment over 90 days.

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

Cshg Logistica   vs.  LIFE CAPITAL PARTNERS

Cshg Logistica

Risk-Adjusted Performance

Very Weak

Over the last 90 days Cshg Logistica has generated negative risk-adjusted returns adding no value to fund investors. Despite somewhat strong essential indicators, Cshg Logistica is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

LIFE CAPITAL PARTNERS

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in LIFE CAPITAL PARTNERS are ranked lower than 3 (%) of all funds and portfolios of funds over the last 90 days. Despite somewhat weak technical and fundamental indicators, LIFE CAPITAL may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Cshg Logistica and LIFE CAPITAL

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

The idea behind Cshg Logistica and LIFE CAPITAL PARTNERS 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.