Correlation Between Cromwell Property and AudioCodes

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

By analyzing existing cross correlation between Cromwell Property Group and AudioCodes, you can compare the effects of market volatilities on Cromwell Property and AudioCodes 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 Cromwell Property with a short position of AudioCodes. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cromwell Property and AudioCodes.

Diversification Opportunities for Cromwell Property and AudioCodes

-0.52

Correlation Coefficient

Cromwell Property  AudioCodes

Excellent diversification

The 3 months correlation between Cromwell and AudioCodes is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding Cromwell Property Group and AudioCodes in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AudioCodes and Cromwell Property 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 Cromwell Property Group are associated (or correlated) with AudioCodes. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AudioCodes has no effect on the direction of Cromwell Property i.e., Cromwell Property and AudioCodes go up and down completely randomly.

Pair Corralation between Cromwell Property and AudioCodes

Assuming the 90 days horizon Cromwell Property Group is expected to generate 0.16 times more return on investment than AudioCodes. However, Cromwell Property Group is 6.38 times less risky than AudioCodes. It trades about 0.13 of its potential returns per unit of risk. AudioCodes is currently generating about -0.07 per unit of risk. If you would invest  27.00  in Cromwell Property Group on August 30, 2024 and sell it today you would earn a total of  1.00  from holding Cromwell Property Group or generate 3.7% return on investment over 90 days.

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

Cromwell Property Group  vs.  AudioCodes

Cromwell Property

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Cromwell Property Group are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable fundamental indicators, Cromwell Property is not utilizing all of its potentials. The latest stock price disturbance, may contribute to mid-run losses for the stockholders.

AudioCodes

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days AudioCodes has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of abnormal performance in the last few months, the Stock's fundamental indicators remain rather sound which may send shares a bit higher in December 2024. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Pair Trading with Cromwell Property and AudioCodes

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

The idea behind Cromwell Property Group and AudioCodes 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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.