Correlation Between Taylor Calvin and Harford Bank

Can any of the company-specific risk be diversified away by investing in both Taylor Calvin and Harford Bank 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 Taylor Calvin and Harford Bank into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Taylor Calvin B and Harford Bank, you can compare the effects of market volatilities on Taylor Calvin and Harford Bank 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 Taylor Calvin with a short position of Harford Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Taylor Calvin and Harford Bank.

Diversification Opportunities for Taylor Calvin and Harford Bank

-0.45

Correlation Coefficient

Taylor Calvin  Harford Bank

Very good diversification

The 3 months correlation between Taylor and Harford is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding Taylor Calvin B and Harford Bank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Harford Bank and Taylor Calvin 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 Taylor Calvin B are associated (or correlated) with Harford Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Harford Bank has no effect on the direction of Taylor Calvin i.e., Taylor Calvin and Harford Bank go up and down completely randomly.

Pair Corralation between Taylor Calvin and Harford Bank

Given the investment horizon of 90 days Taylor Calvin is expected to generate 1.31 times less return on investment than Harford Bank. But when comparing it to its historical volatility, Taylor Calvin B is 1.12 times less risky than Harford Bank. It trades about 0.05 of its potential returns per unit of risk. Harford Bank is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest  3,216  in Harford Bank on September 25, 2024 and sell it today you would earn a total of  254.00  from holding Harford Bank or generate 7.9% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	99.2%
Values	Daily Returns

Taylor Calvin B  vs.  Harford Bank

Taylor Calvin B

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Taylor Calvin B are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong fundamental indicators, Taylor Calvin is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Harford Bank

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Harford Bank are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite quite persistent fundamental drivers, Harford Bank is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

Pair Trading with Taylor Calvin and Harford Bank

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

The idea behind Taylor Calvin B and Harford 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.

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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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.