Correlation Between Various Eateries and Cembra Money

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

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

Diversification Opportunities for Various Eateries and Cembra Money

-0.86

Correlation Coefficient

Various Eateries  Cembra Money

Pay attention - limited upside

The 3 months correlation between Various and Cembra is -0.86. Overlapping area represents the amount of risk that can be diversified away by holding Various Eateries PLC 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 Various Eateries 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 Various Eateries PLC 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 Various Eateries i.e., Various Eateries and Cembra Money go up and down completely randomly.

Pair Corralation between Various Eateries and Cembra Money

Assuming the 90 days trading horizon Various Eateries PLC is expected to under-perform the Cembra Money. In addition to that, Various Eateries is 1.5 times more volatile than Cembra Money Bank. It trades about -0.42 of its total potential returns per unit of risk. Cembra Money Bank is currently generating about 0.6 per unit of volatility. If you would invest  8,155  in Cembra Money Bank on October 25, 2024 and sell it today you would earn a total of  730.00  from holding Cembra Money Bank or generate 8.95% return on investment over 90 days.

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

Various Eateries PLC  vs.  Cembra Money Bank

Various Eateries PLC

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Various Eateries PLC has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in February 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Cembra Money Bank

Risk-Adjusted Performance

18 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Cembra Money Bank are ranked lower than 18 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unsteady basic indicators, Cembra Money unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Various Eateries and Cembra Money

The main advantage of trading using opposite Various Eateries and Cembra Money positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Various Eateries 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 Various Eateries PLC 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.

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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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.