Correlation Between Caravelle International and High Performance

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

By analyzing existing cross correlation between Caravelle International Group and High Performance Beverages, you can compare the effects of market volatilities on Caravelle International and High Performance 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 Caravelle International with a short position of High Performance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Caravelle International and High Performance.

Diversification Opportunities for Caravelle International and High Performance

0.0

Correlation Coefficient

Caravelle International  High Performance

Pay attention - limited upside

The 3 months correlation between Caravelle and High is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Caravelle International Group and High Performance Beverages in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on High Performance Bev and Caravelle International 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 Caravelle International Group are associated (or correlated) with High Performance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of High Performance Bev has no effect on the direction of Caravelle International i.e., Caravelle International and High Performance go up and down completely randomly.

Pair Corralation between Caravelle International and High Performance

If you would invest  250.00  in Caravelle International Group on October 23, 2024 and sell it today you would earn a total of  144.00  from holding Caravelle International Group or generate 57.6% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	94.44%
Values	Daily Returns

Caravelle International Group  vs.  High Performance Beverages

Caravelle International

Risk-Adjusted Performance

18 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Caravelle International Group are ranked lower than 18 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating fundamental indicators, Caravelle International displayed solid returns over the last few months and may actually be approaching a breakup point.

High Performance Bev

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Caravelle International and High Performance

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

The idea behind Caravelle International Group and High Performance Beverages 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 Global Correlations module to find global opportunities by holding instruments from different markets.