Correlation Between Partners Value and Cymbria

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

By analyzing existing cross correlation between Partners Value Investments and Cymbria, you can compare the effects of market volatilities on Partners Value and Cymbria 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 Partners Value with a short position of Cymbria. Check out your portfolio center. Please also check ongoing floating volatility patterns of Partners Value and Cymbria.

Diversification Opportunities for Partners Value and Cymbria

0.76

Correlation Coefficient

Partners Value  Cymbria

Poor diversification

The 3 months correlation between Partners and Cymbria is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Partners Value Investments and Cymbria in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cymbria and Partners Value 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 Partners Value Investments are associated (or correlated) with Cymbria. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cymbria has no effect on the direction of Partners Value i.e., Partners Value and Cymbria go up and down completely randomly.

Pair Corralation between Partners Value and Cymbria

Assuming the 90 days trading horizon Partners Value Investments is expected to generate 3.41 times more return on investment than Cymbria. However, Partners Value is 3.41 times more volatile than Cymbria. It trades about 0.25 of its potential returns per unit of risk. Cymbria is currently generating about 0.12 per unit of risk. If you would invest  9,600  in Partners Value Investments on September 13, 2024 and sell it today you would earn a total of  6,650  from holding Partners Value Investments or generate 69.27% return on investment over 90 days.

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

Partners Value Investments  vs.  Cymbria

Partners Value Inves

Risk-Adjusted Performance

19 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Partners Value Investments are ranked lower than 19 (%) of all global equities and portfolios over the last 90 days. Despite somewhat unfluctuating basic indicators, Partners Value sustained solid returns over the last few months and may actually be approaching a breakup point.

Cymbria

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Cymbria are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating fundamental drivers, Cymbria may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Partners Value and Cymbria

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

The idea behind Partners Value Investments and Cymbria 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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.