Correlation Between Woodbrook Group and Cal Bay

Can any of the company-specific risk be diversified away by investing in both Woodbrook Group and Cal Bay 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 Woodbrook Group and Cal Bay into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Woodbrook Group Holdings and Cal Bay Intl, you can compare the effects of market volatilities on Woodbrook Group and Cal Bay 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 Woodbrook Group with a short position of Cal Bay. Check out your portfolio center. Please also check ongoing floating volatility patterns of Woodbrook Group and Cal Bay.

Diversification Opportunities for Woodbrook Group and Cal Bay

0.0

Correlation Coefficient

Woodbrook Group  Cal Bay

Pay attention - limited upside

The 3 months correlation between Woodbrook and Cal is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Woodbrook Group Holdings and Cal Bay Intl in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cal Bay Intl and Woodbrook Group 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 Woodbrook Group Holdings are associated (or correlated) with Cal Bay. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cal Bay Intl has no effect on the direction of Woodbrook Group i.e., Woodbrook Group and Cal Bay go up and down completely randomly.

Pair Corralation between Woodbrook Group and Cal Bay

If you would invest  0.01  in Cal Bay Intl on September 13, 2024 and sell it today you would earn a total of  0.00  from holding Cal Bay Intl or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	97.67%
Values	Daily Returns

Woodbrook Group Holdings  vs.  Cal Bay Intl

Woodbrook Group Holdings

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Woodbrook Group Holdings are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite nearly inconsistent fundamental drivers, Woodbrook Group reported solid returns over the last few months and may actually be approaching a breakup point.

Cal Bay Intl

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Cal Bay Intl has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong basic indicators, Cal Bay is not utilizing all of its potentials. The recent stock price confusion, may contribute to short-horizon losses for the traders.

Pair Trading with Woodbrook Group and Cal Bay

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

The idea behind Woodbrook Group Holdings and Cal Bay Intl 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.

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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.