Correlation Between Cresco Labs and American Public
Can any of the company-specific risk be diversified away by investing in both Cresco Labs and American Public 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 Cresco Labs and American Public into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cresco Labs and American Public Education, you can compare the effects of market volatilities on Cresco Labs and American Public 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 Cresco Labs with a short position of American Public. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cresco Labs and American Public.
Diversification Opportunities for Cresco Labs and American Public
-0.94 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Cresco and American is -0.94. Overlapping area represents the amount of risk that can be diversified away by holding Cresco Labs and American Public Education in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American Public Education and Cresco Labs 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 Cresco Labs are associated (or correlated) with American Public. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of American Public Education has no effect on the direction of Cresco Labs i.e., Cresco Labs and American Public go up and down completely randomly.
Pair Corralation between Cresco Labs and American Public
Assuming the 90 days trading horizon Cresco Labs is expected to under-perform the American Public. In addition to that, Cresco Labs is 1.57 times more volatile than American Public Education. It trades about -0.14 of its total potential returns per unit of risk. American Public Education is currently generating about 0.22 per unit of volatility. If you would invest 1,290 in American Public Education on September 26, 2024 and sell it today you would earn a total of 700.00 from holding American Public Education or generate 54.26% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
Cresco Labs vs. American Public Education
Performance |
Timeline |
Cresco Labs |
American Public Education |
Cresco Labs and American Public Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Cresco Labs and American Public
The main advantage of trading using opposite Cresco Labs and American Public positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cresco Labs position performs unexpectedly, American Public 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 American Public will offset losses from the drop in American Public's long position.Cresco Labs vs. American Public Education | Cresco Labs vs. EEDUCATION ALBERT AB | Cresco Labs vs. GigaMedia | Cresco Labs vs. JD SPORTS FASH |
American Public vs. IDP EDUCATION LTD | American Public vs. TAL Education Group | American Public vs. Grand Canyon Education | American Public vs. Graham Holdings Co |
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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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