Correlation Between Spring Valley and CIB Marine
Can any of the company-specific risk be diversified away by investing in both Spring Valley and CIB Marine 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 Spring Valley and CIB Marine into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Spring Valley Acquisition and CIB Marine Bancshares, you can compare the effects of market volatilities on Spring Valley and CIB Marine 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 Spring Valley with a short position of CIB Marine. Check out your portfolio center. Please also check ongoing floating volatility patterns of Spring Valley and CIB Marine.
Diversification Opportunities for Spring Valley and CIB Marine
0.6 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Spring and CIB is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Spring Valley Acquisition and CIB Marine Bancshares in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CIB Marine Bancshares and Spring Valley 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 Spring Valley Acquisition are associated (or correlated) with CIB Marine. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CIB Marine Bancshares has no effect on the direction of Spring Valley i.e., Spring Valley and CIB Marine go up and down completely randomly.
Pair Corralation between Spring Valley and CIB Marine
Given the investment horizon of 90 days Spring Valley Acquisition is expected to generate 0.1 times more return on investment than CIB Marine. However, Spring Valley Acquisition is 9.66 times less risky than CIB Marine. It trades about 0.1 of its potential returns per unit of risk. CIB Marine Bancshares is currently generating about 0.01 per unit of risk. If you would invest 1,025 in Spring Valley Acquisition on December 4, 2024 and sell it today you would earn a total of 112.00 from holding Spring Valley Acquisition or generate 10.93% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
Spring Valley Acquisition vs. CIB Marine Bancshares
Performance |
Timeline |
Spring Valley Acquisition |
CIB Marine Bancshares |
Spring Valley and CIB Marine Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Spring Valley and CIB Marine
The main advantage of trading using opposite Spring Valley and CIB Marine positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Spring Valley position performs unexpectedly, CIB Marine 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 CIB Marine will offset losses from the drop in CIB Marine's long position.The idea behind Spring Valley Acquisition and CIB Marine Bancshares 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.CIB Marine vs. U I Financial | CIB Marine vs. United Bancorporation of | CIB Marine vs. Harbor Bankshares | CIB Marine vs. Citizens Bancshares Corp |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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