Correlation Between TRANS NATIONWIDE and C I

Can any of the company-specific risk be diversified away by investing in both TRANS NATIONWIDE and C I 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 TRANS NATIONWIDE and C I into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between TRANS NATIONWIDE EXPRESS PLC and C I LEASING, you can compare the effects of market volatilities on TRANS NATIONWIDE and C I 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 TRANS NATIONWIDE with a short position of C I. Check out your portfolio center. Please also check ongoing floating volatility patterns of TRANS NATIONWIDE and C I.

Diversification Opportunities for TRANS NATIONWIDE and C I

0.63

Correlation Coefficient

TRANS NATIONWIDE  C I

Poor diversification

The 3 months correlation between TRANS and CILEASING is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding TRANS NATIONWIDE EXPRESS PLC and C I LEASING in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on C I LEASING and TRANS NATIONWIDE 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 TRANS NATIONWIDE EXPRESS PLC are associated (or correlated) with C I. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of C I LEASING has no effect on the direction of TRANS NATIONWIDE i.e., TRANS NATIONWIDE and C I go up and down completely randomly.

Pair Corralation between TRANS NATIONWIDE and C I

Assuming the 90 days trading horizon TRANS NATIONWIDE EXPRESS PLC is expected to generate 0.65 times more return on investment than C I. However, TRANS NATIONWIDE EXPRESS PLC is 1.54 times less risky than C I. It trades about 0.31 of its potential returns per unit of risk. C I LEASING is currently generating about 0.07 per unit of risk. If you would invest  123.00  in TRANS NATIONWIDE EXPRESS PLC on October 24, 2024 and sell it today you would earn a total of  77.00  from holding TRANS NATIONWIDE EXPRESS PLC or generate 62.6% return on investment over 90 days.

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

TRANS NATIONWIDE EXPRESS PLC  vs.  C I LEASING

TRANS NATIONWIDE EXP

Risk-Adjusted Performance

24 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in TRANS NATIONWIDE EXPRESS PLC are ranked lower than 24 (%) of all global equities and portfolios over the last 90 days. In spite of fairly inconsistent basic indicators, TRANS NATIONWIDE showed solid returns over the last few months and may actually be approaching a breakup point.

C I LEASING

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in C I LEASING are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite fairly inconsistent basic indicators, C I demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with TRANS NATIONWIDE and C I

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

The idea behind TRANS NATIONWIDE EXPRESS PLC and C I LEASING 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.

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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 Global Correlations module to find global opportunities by holding instruments from different markets.