Correlation Between Montea CVA and Care Property

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

By analyzing existing cross correlation between Montea CVA and Care Property Invest, you can compare the effects of market volatilities on Montea CVA and Care Property 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 Montea CVA with a short position of Care Property. Check out your portfolio center. Please also check ongoing floating volatility patterns of Montea CVA and Care Property.

Diversification Opportunities for Montea CVA and Care Property

0.18

Correlation Coefficient

Montea CVA  Care Property

Average diversification

The 3 months correlation between Montea and Care is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding Montea CVA and Care Property Invest in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Care Property Invest and Montea CVA 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 Montea CVA are associated (or correlated) with Care Property. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Care Property Invest has no effect on the direction of Montea CVA i.e., Montea CVA and Care Property go up and down completely randomly.

Pair Corralation between Montea CVA and Care Property

Assuming the 90 days trading horizon Montea CVA is expected to generate 1.18 times less return on investment than Care Property. But when comparing it to its historical volatility, Montea CVA is 1.01 times less risky than Care Property. It trades about 0.07 of its potential returns per unit of risk. Care Property Invest is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest  1,130  in Care Property Invest on December 30, 2024 and sell it today you would earn a total of  82.00  from holding Care Property Invest or generate 7.26% return on investment over 90 days.

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

Montea CVA  vs.  Care Property Invest

Montea CVA

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Montea CVA are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Even with relatively invariable basic indicators, Montea CVA is not utilizing all of its potentials. The current stock price agitation, may contribute to short-term losses for the retail investors.

Care Property Invest

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Care Property Invest are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak fundamental drivers, Care Property may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Montea CVA and Care Property

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

The idea behind Montea CVA and Care Property Invest 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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.