Correlation Between STORE ELECTRONIC and CHRYSALIS INVESTMENTS

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

By analyzing existing cross correlation between STORE ELECTRONIC and CHRYSALIS INVESTMENTS LTD, you can compare the effects of market volatilities on STORE ELECTRONIC and CHRYSALIS INVESTMENTS 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 STORE ELECTRONIC with a short position of CHRYSALIS INVESTMENTS. Check out your portfolio center. Please also check ongoing floating volatility patterns of STORE ELECTRONIC and CHRYSALIS INVESTMENTS.

Diversification Opportunities for STORE ELECTRONIC and CHRYSALIS INVESTMENTS

0.24

Correlation Coefficient

STORE ELECTRONIC  CHRYSALIS INVESTMENTS

Modest diversification

The 3 months correlation between STORE and CHRYSALIS is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding STORE ELECTRONIC and CHRYSALIS INVESTMENTS LTD in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CHRYSALIS INVESTMENTS LTD and STORE ELECTRONIC 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 STORE ELECTRONIC are associated (or correlated) with CHRYSALIS INVESTMENTS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CHRYSALIS INVESTMENTS LTD has no effect on the direction of STORE ELECTRONIC i.e., STORE ELECTRONIC and CHRYSALIS INVESTMENTS go up and down completely randomly.

Pair Corralation between STORE ELECTRONIC and CHRYSALIS INVESTMENTS

Assuming the 90 days trading horizon STORE ELECTRONIC is expected to generate 2.83 times more return on investment than CHRYSALIS INVESTMENTS. However, STORE ELECTRONIC is 2.83 times more volatile than CHRYSALIS INVESTMENTS LTD. It trades about 0.2 of its potential returns per unit of risk. CHRYSALIS INVESTMENTS LTD is currently generating about -0.25 per unit of risk. If you would invest  16,260  in STORE ELECTRONIC on December 11, 2024 and sell it today you would earn a total of  2,900  from holding STORE ELECTRONIC or generate 17.84% return on investment over 90 days.

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

STORE ELECTRONIC  vs.  CHRYSALIS INVESTMENTS LTD

STORE ELECTRONIC

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in STORE ELECTRONIC are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. In spite of rather fragile primary indicators, STORE ELECTRONIC exhibited solid returns over the last few months and may actually be approaching a breakup point.

CHRYSALIS INVESTMENTS LTD

Risk-Adjusted Performance

Very Weak

Over the last 90 days CHRYSALIS INVESTMENTS LTD has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, CHRYSALIS INVESTMENTS is not utilizing all of its potentials. The latest stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with STORE ELECTRONIC and CHRYSALIS INVESTMENTS

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

The idea behind STORE ELECTRONIC and CHRYSALIS INVESTMENTS LTD 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.

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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.