Correlation Between Palmer Square and CONSTELLATION
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By analyzing existing cross correlation between Palmer Square Ultra Short and CONSTELLATION BRANDS INC, you can compare the effects of market volatilities on Palmer Square and CONSTELLATION 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 Palmer Square with a short position of CONSTELLATION. Check out your portfolio center. Please also check ongoing floating volatility patterns of Palmer Square and CONSTELLATION.
Diversification Opportunities for Palmer Square and CONSTELLATION
-0.44 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Palmer and CONSTELLATION is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding Palmer Square Ultra Short and CONSTELLATION BRANDS INC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CONSTELLATION BRANDS INC and Palmer Square 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 Palmer Square Ultra Short are associated (or correlated) with CONSTELLATION. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CONSTELLATION BRANDS INC has no effect on the direction of Palmer Square i.e., Palmer Square and CONSTELLATION go up and down completely randomly.
Pair Corralation between Palmer Square and CONSTELLATION
Assuming the 90 days horizon Palmer Square Ultra Short is expected to generate 0.3 times more return on investment than CONSTELLATION. However, Palmer Square Ultra Short is 3.36 times less risky than CONSTELLATION. It trades about -0.01 of its potential returns per unit of risk. CONSTELLATION BRANDS INC is currently generating about -0.2 per unit of risk. If you would invest 1,990 in Palmer Square Ultra Short on October 3, 2024 and sell it today you would lose (3.00) from holding Palmer Square Ultra Short or give up 0.15% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Very Weak |
Accuracy | 98.39% |
Values | Daily Returns |
Palmer Square Ultra Short vs. CONSTELLATION BRANDS INC
Performance |
Timeline |
Palmer Square Ultra |
CONSTELLATION BRANDS INC |
Palmer Square and CONSTELLATION Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Palmer Square and CONSTELLATION
The main advantage of trading using opposite Palmer Square and CONSTELLATION positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Palmer Square position performs unexpectedly, CONSTELLATION 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 CONSTELLATION will offset losses from the drop in CONSTELLATION's long position.Palmer Square vs. Nuveen Arizona Municipal | Palmer Square vs. Short Term Government Fund | Palmer Square vs. Oklahoma Municipal Fund | Palmer Square vs. Nuveen Minnesota Municipal |
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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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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