Correlation Between CCL Industries and Bridgemarq Real

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

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

Diversification Opportunities for CCL Industries and Bridgemarq Real

-0.4

Correlation Coefficient

CCL Industries  Bridgemarq Real

Very good diversification

The 3 months correlation between CCL and Bridgemarq is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding CCL Industries and Bridgemarq Real Estate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bridgemarq Real Estate and CCL Industries 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 CCL Industries are associated (or correlated) with Bridgemarq Real. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bridgemarq Real Estate has no effect on the direction of CCL Industries i.e., CCL Industries and Bridgemarq Real go up and down completely randomly.

Pair Corralation between CCL Industries and Bridgemarq Real

Assuming the 90 days trading horizon CCL Industries is expected to under-perform the Bridgemarq Real. But the stock apears to be less risky and, when comparing its historical volatility, CCL Industries is 1.05 times less risky than Bridgemarq Real. The stock trades about -0.13 of its potential returns per unit of risk. The Bridgemarq Real Estate is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest  1,380  in Bridgemarq Real Estate on September 29, 2024 and sell it today you would earn a total of  146.00  from holding Bridgemarq Real Estate or generate 10.58% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

CCL Industries  vs.  Bridgemarq Real Estate

CCL Industries

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days CCL Industries has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unfluctuating performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Bridgemarq Real Estate

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Bridgemarq Real Estate are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of very uncertain technical and fundamental indicators, Bridgemarq Real may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with CCL Industries and Bridgemarq Real

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

The idea behind CCL Industries and Bridgemarq Real Estate 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 Stocks Directory module to find actively traded stocks across global markets.