Correlation Between Just Eat and CVC Capital
Can any of the company-specific risk be diversified away by investing in both Just Eat and CVC Capital 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 Just Eat and CVC Capital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Just Eat Takeaway and CVC Capital Partners, you can compare the effects of market volatilities on Just Eat and CVC Capital 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 Just Eat with a short position of CVC Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Just Eat and CVC Capital.
Diversification Opportunities for Just Eat and CVC Capital
0.12 | Correlation Coefficient |
Average diversification
The 3 months correlation between Just and CVC is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding Just Eat Takeaway and CVC Capital Partners in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CVC Capital Partners and Just Eat 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 Just Eat Takeaway are associated (or correlated) with CVC Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CVC Capital Partners has no effect on the direction of Just Eat i.e., Just Eat and CVC Capital go up and down completely randomly.
Pair Corralation between Just Eat and CVC Capital
Assuming the 90 days trading horizon Just Eat Takeaway is expected to generate 3.53 times more return on investment than CVC Capital. However, Just Eat is 3.53 times more volatile than CVC Capital Partners. It trades about 0.07 of its potential returns per unit of risk. CVC Capital Partners is currently generating about -0.08 per unit of risk. If you would invest 1,583 in Just Eat Takeaway on December 5, 2024 and sell it today you would earn a total of 362.00 from holding Just Eat Takeaway or generate 22.87% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Just Eat Takeaway vs. CVC Capital Partners
Performance |
Timeline |
Just Eat Takeaway |
CVC Capital Partners |
Just Eat and CVC Capital Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Just Eat and CVC Capital
The main advantage of trading using opposite Just Eat and CVC Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Just Eat position performs unexpectedly, CVC Capital 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 CVC Capital will offset losses from the drop in CVC Capital's long position.Just Eat vs. Prosus NV | Just Eat vs. Koninklijke Ahold Delhaize | Just Eat vs. Adyen NV | Just Eat vs. ASML Holding NV |
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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 CEOs Directory module to screen CEOs from public companies around the world.
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