Correlation Between Power Of and Cashmere Valley

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

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

Diversification Opportunities for Power Of and Cashmere Valley

0.81

Correlation Coefficient

Power Of  Cashmere Valley

Very poor diversification

The 3 months correlation between Power and Cashmere is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Power of and Cashmere Valley Bank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cashmere Valley Bank and Power Of 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 Power of are associated (or correlated) with Cashmere Valley. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cashmere Valley Bank has no effect on the direction of Power Of i.e., Power Of and Cashmere Valley go up and down completely randomly.

Pair Corralation between Power Of and Cashmere Valley

Assuming the 90 days horizon Power of is expected to generate 1.34 times more return on investment than Cashmere Valley. However, Power Of is 1.34 times more volatile than Cashmere Valley Bank. It trades about 0.2 of its potential returns per unit of risk. Cashmere Valley Bank is currently generating about 0.1 per unit of risk. If you would invest  3,553  in Power of on May 12, 2025 and sell it today you would earn a total of  640.00  from holding Power of or generate 18.01% return on investment over 90 days.

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

Power of  vs.  Cashmere Valley Bank

Power Of

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Power of are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak fundamental indicators, Power Of reported solid returns over the last few months and may actually be approaching a breakup point.

Cashmere Valley Bank

Risk-Adjusted Performance

Fair

Compared to the overall equity markets, risk-adjusted returns on investments in Cashmere Valley Bank are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak technical indicators, Cashmere Valley may actually be approaching a critical reversion point that can send shares even higher in September 2025.

Pair Trading with Power Of and Cashmere Valley

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

The idea behind Power of and Cashmere Valley 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.

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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.