Correlation Between Cohen Dev and Elco
Can any of the company-specific risk be diversified away by investing in both Cohen Dev and Elco 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 Cohen Dev and Elco into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cohen Dev and Elco, you can compare the effects of market volatilities on Cohen Dev and Elco 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 Cohen Dev with a short position of Elco. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cohen Dev and Elco.
Diversification Opportunities for Cohen Dev and Elco
Good diversification
The 3 months correlation between Cohen and Elco is -0.06. Overlapping area represents the amount of risk that can be diversified away by holding Cohen Dev and Elco in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Elco and Cohen Dev 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 Cohen Dev are associated (or correlated) with Elco. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Elco has no effect on the direction of Cohen Dev i.e., Cohen Dev and Elco go up and down completely randomly.
Pair Corralation between Cohen Dev and Elco
Assuming the 90 days trading horizon Cohen Dev is expected to generate 0.86 times more return on investment than Elco. However, Cohen Dev is 1.16 times less risky than Elco. It trades about 0.0 of its potential returns per unit of risk. Elco is currently generating about -0.13 per unit of risk. If you would invest 1,095,000 in Cohen Dev on January 26, 2024 and sell it today you would lose (5,000) from holding Cohen Dev or give up 0.46% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Cohen Dev vs. Elco
Performance |
Timeline |
Cohen Dev |
Elco |
Cohen Dev and Elco Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Cohen Dev and Elco
The main advantage of trading using opposite Cohen Dev and Elco positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cohen Dev position performs unexpectedly, Elco 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 Elco will offset losses from the drop in Elco's long position.Cohen Dev vs. Atreyu Capital Markets | Cohen Dev vs. IBI Inv House | Cohen Dev vs. Delek Automotive Systems | Cohen Dev vs. Scope Metals Group |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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