Correlation Between Cgrowth Capital and Spirax Sarco

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

By analyzing existing cross correlation between Cgrowth Capital and Spirax Sarco Engineering PLC, you can compare the effects of market volatilities on Cgrowth Capital and Spirax Sarco 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 Cgrowth Capital with a short position of Spirax Sarco. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cgrowth Capital and Spirax Sarco.

Diversification Opportunities for Cgrowth Capital and Spirax Sarco

0.08

Correlation Coefficient

Cgrowth Capital  Spirax Sarco

Significant diversification

The 3 months correlation between Cgrowth and Spirax is 0.08. Overlapping area represents the amount of risk that can be diversified away by holding Cgrowth Capital and Spirax Sarco Engineering PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Spirax Sarco Enginee and Cgrowth Capital 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 Cgrowth Capital are associated (or correlated) with Spirax Sarco. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Spirax Sarco Enginee has no effect on the direction of Cgrowth Capital i.e., Cgrowth Capital and Spirax Sarco go up and down completely randomly.

Pair Corralation between Cgrowth Capital and Spirax Sarco

Given the investment horizon of 90 days Cgrowth Capital is expected to generate 10.76 times more return on investment than Spirax Sarco. However, Cgrowth Capital is 10.76 times more volatile than Spirax Sarco Engineering PLC. It trades about 0.2 of its potential returns per unit of risk. Spirax Sarco Engineering PLC is currently generating about 0.0 per unit of risk. If you would invest  0.10  in Cgrowth Capital on September 13, 2024 and sell it today you would earn a total of  0.30  from holding Cgrowth Capital or generate 300.0% return on investment over 90 days.

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

Cgrowth Capital  vs.  Spirax Sarco Engineering PLC

Cgrowth Capital

Risk-Adjusted Performance

15 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Cgrowth Capital are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. Despite somewhat fragile basic indicators, Cgrowth Capital sustained solid returns over the last few months and may actually be approaching a breakup point.

Spirax Sarco Enginee

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Spirax Sarco Engineering PLC has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong basic indicators, Spirax Sarco is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Cgrowth Capital and Spirax Sarco

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

The idea behind Cgrowth Capital and Spirax Sarco Engineering PLC 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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.