Correlation Between Regional Container and B 52
Can any of the company-specific risk be diversified away by investing in both Regional Container and B 52 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 Regional Container and B 52 into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Regional Container Lines and B 52 Capital Public, you can compare the effects of market volatilities on Regional Container and B 52 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 Regional Container with a short position of B 52. Check out your portfolio center. Please also check ongoing floating volatility patterns of Regional Container and B 52.
Diversification Opportunities for Regional Container and B 52
-0.54 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Regional and B52 is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding Regional Container Lines and B 52 Capital Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on B 52 Capital and Regional Container 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 Regional Container Lines are associated (or correlated) with B 52. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of B 52 Capital has no effect on the direction of Regional Container i.e., Regional Container and B 52 go up and down completely randomly.
Pair Corralation between Regional Container and B 52
Assuming the 90 days trading horizon Regional Container Lines is expected to generate 16.65 times more return on investment than B 52. However, Regional Container is 16.65 times more volatile than B 52 Capital Public. It trades about 0.12 of its potential returns per unit of risk. B 52 Capital Public is currently generating about 0.02 per unit of risk. If you would invest 2,408 in Regional Container Lines on September 26, 2024 and sell it today you would earn a total of 342.00 from holding Regional Container Lines or generate 14.2% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Very Weak |
Accuracy | 99.18% |
Values | Daily Returns |
Regional Container Lines vs. B 52 Capital Public
Performance |
Timeline |
Regional Container Lines |
B 52 Capital |
Regional Container and B 52 Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Regional Container and B 52
The main advantage of trading using opposite Regional Container and B 52 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Regional Container position performs unexpectedly, B 52 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 B 52 will offset losses from the drop in B 52's long position.Regional Container vs. Project Planning Service | Regional Container vs. Qualitech Public | Regional Container vs. SGF Capital Public | Regional Container vs. Power Solution Technologies |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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