Correlation Between LIFE CAPITAL and Cshg Logistica

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

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

Diversification Opportunities for LIFE CAPITAL and Cshg Logistica

0.71

Correlation Coefficient

LIFE CAPITAL  Cshg Logistica

Poor diversification

The 3 months correlation between LIFE and Cshg is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding LIFE CAPITAL PARTNERS and Cshg Logistica in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cshg Logistica and LIFE CAPITAL 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 LIFE CAPITAL PARTNERS are associated (or correlated) with Cshg Logistica. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cshg Logistica has no effect on the direction of LIFE CAPITAL i.e., LIFE CAPITAL and Cshg Logistica go up and down completely randomly.

Pair Corralation between LIFE CAPITAL and Cshg Logistica

Assuming the 90 days trading horizon LIFE CAPITAL PARTNERS is expected to under-perform the Cshg Logistica. In addition to that, LIFE CAPITAL is 1.72 times more volatile than Cshg Logistica . It trades about -0.17 of its total potential returns per unit of risk. Cshg Logistica is currently generating about -0.08 per unit of volatility. If you would invest  15,663  in Cshg Logistica on September 12, 2024 and sell it today you would lose (763.00) from holding Cshg Logistica or give up 4.87% of portfolio value over 90 days.

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

LIFE CAPITAL PARTNERS  vs.  Cshg Logistica

LIFE CAPITAL PARTNERS

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days LIFE CAPITAL PARTNERS has generated negative risk-adjusted returns adding no value to fund investors. Despite weak performance in the last few months, the Fund's technical and fundamental indicators remain somewhat strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for the fund investors.

Cshg Logistica

Risk-Adjusted Performance

0 of 100

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.

Pair Trading with LIFE CAPITAL and Cshg Logistica

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

The idea behind LIFE CAPITAL PARTNERS and Cshg Logistica 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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.