Correlation Between Grillit and CAVU Resources

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

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

Diversification Opportunities for Grillit and CAVU Resources

0.7

Correlation Coefficient

Grillit  CAVU Resources

Poor diversification

The 3 months correlation between Grillit and CAVU is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Grillit and CAVU Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CAVU Resources and Grillit 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 Grillit are associated (or correlated) with CAVU Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CAVU Resources has no effect on the direction of Grillit i.e., Grillit and CAVU Resources go up and down completely randomly.

Pair Corralation between Grillit and CAVU Resources

Given the investment horizon of 90 days Grillit is expected to generate 1.38 times more return on investment than CAVU Resources. However, Grillit is 1.38 times more volatile than CAVU Resources. It trades about 0.01 of its potential returns per unit of risk. CAVU Resources is currently generating about -0.07 per unit of risk. If you would invest  0.05  in Grillit on May 6, 2025 and sell it today you would lose (0.02) from holding Grillit or give up 40.0% of portfolio value over 90 days.

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

Grillit  vs.  CAVU Resources

Grillit

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Grillit are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain essential indicators, Grillit may actually be approaching a critical reversion point that can send shares even higher in September 2025.

CAVU Resources

Risk-Adjusted Performance

Very Weak

Over the last 90 days CAVU Resources has generated negative risk-adjusted returns adding no value to investors with long positions. Even with uncertain performance in the last few months, the Stock's basic indicators remain relatively invariable which may send shares a bit higher in September 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Pair Trading with Grillit and CAVU Resources

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

The idea behind Grillit and CAVU Resources 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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.