Correlation Between Secure Property and Cembra Money

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

By analyzing existing cross correlation between Secure Property Development and Cembra Money Bank, you can compare the effects of market volatilities on Secure Property and Cembra Money 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 Secure Property with a short position of Cembra Money. Check out your portfolio center. Please also check ongoing floating volatility patterns of Secure Property and Cembra Money.

Diversification Opportunities for Secure Property and Cembra Money

0.56

Correlation Coefficient

Secure Property  Cembra Money

Very weak diversification

The 3 months correlation between Secure and Cembra is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding Secure Property Development and Cembra Money Bank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cembra Money Bank and Secure Property 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 Secure Property Development are associated (or correlated) with Cembra Money. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cembra Money Bank has no effect on the direction of Secure Property i.e., Secure Property and Cembra Money go up and down completely randomly.

Pair Corralation between Secure Property and Cembra Money

Assuming the 90 days trading horizon Secure Property is expected to generate 2.1 times less return on investment than Cembra Money. In addition to that, Secure Property is 1.08 times more volatile than Cembra Money Bank. It trades about 0.05 of its total potential returns per unit of risk. Cembra Money Bank is currently generating about 0.11 per unit of volatility. If you would invest  6,205  in Cembra Money Bank on September 4, 2024 and sell it today you would earn a total of  1,924  from holding Cembra Money Bank or generate 31.01% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	98.8%
Values	Daily Returns

Secure Property Development  vs.  Cembra Money Bank

Secure Property Deve

Risk-Adjusted Performance

9 of 100

OK

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

Cembra Money Bank

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Cembra Money Bank are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, Cembra Money is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Secure Property and Cembra Money

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

The idea behind Secure Property Development and Cembra Money Bank 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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.