Correlation Between Minco Capital and CBLT

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

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

Diversification Opportunities for Minco Capital and CBLT

0.14

Correlation Coefficient

Minco Capital  CBLT

Average diversification

The 3 months correlation between Minco and CBLT is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding Minco Capital Corp and CBLT Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CBLT Inc and Minco 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 Minco Capital Corp are associated (or correlated) with CBLT. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CBLT Inc has no effect on the direction of Minco Capital i.e., Minco Capital and CBLT go up and down completely randomly.

Pair Corralation between Minco Capital and CBLT

Assuming the 90 days horizon Minco Capital Corp is expected to under-perform the CBLT. But the stock apears to be less risky and, when comparing its historical volatility, Minco Capital Corp is 1.84 times less risky than CBLT. The stock trades about -0.03 of its potential returns per unit of risk. The CBLT Inc is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest  1.50  in CBLT Inc on December 28, 2024 and sell it today you would earn a total of  0.00  from holding CBLT Inc or generate 0.0% return on investment over 90 days.

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

Minco Capital Corp  vs.  CBLT Inc

Minco Capital Corp

Risk-Adjusted Performance

Very Weak

Over the last 90 days Minco Capital Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unfluctuating performance, the Stock's basic indicators remain stable and the latest fuss on Wall Street may also be a sign of long-term gains for the venture sophisticated investors.

CBLT Inc

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in CBLT Inc are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal essential indicators, CBLT showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Minco Capital and CBLT

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

The idea behind Minco Capital Corp and CBLT 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 Global Correlations module to find global opportunities by holding instruments from different markets.