Correlation Between Calbee and Yuenglings Ice

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

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

Diversification Opportunities for Calbee and Yuenglings Ice

0.28

Correlation Coefficient

Calbee  Yuenglings Ice

Modest diversification

The 3 months correlation between Calbee and Yuenglings is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding Calbee Inc and Yuenglings Ice Cream in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Yuenglings Ice Cream and Calbee 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 Calbee Inc are associated (or correlated) with Yuenglings Ice. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Yuenglings Ice Cream has no effect on the direction of Calbee i.e., Calbee and Yuenglings Ice go up and down completely randomly.

Pair Corralation between Calbee and Yuenglings Ice

Assuming the 90 days horizon Calbee is expected to generate 171.7 times less return on investment than Yuenglings Ice. But when comparing it to its historical volatility, Calbee Inc is 6.91 times less risky than Yuenglings Ice. It trades about 0.0 of its potential returns per unit of risk. Yuenglings Ice Cream is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest  0.72  in Yuenglings Ice Cream on September 30, 2024 and sell it today you would lose (0.43) from holding Yuenglings Ice Cream or give up 59.72% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	99.6%
Values	Daily Returns

Calbee Inc  vs.  Yuenglings Ice Cream

Calbee Inc

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Calbee Inc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unfluctuating performance in the last few months, the Stock's technical and fundamental indicators remain fairly strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Yuenglings Ice Cream

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Yuenglings Ice Cream are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of very fragile basic indicators, Yuenglings Ice displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Calbee and Yuenglings Ice

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

The idea behind Calbee Inc and Yuenglings Ice Cream 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 CEOs Directory module to screen CEOs from public companies around the world.