Correlation Between CP ALL and Assetwise Public

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

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

Diversification Opportunities for CP ALL and Assetwise Public

-0.36

Correlation Coefficient

CP ALL  Assetwise Public

Very good diversification

The 3 months correlation between CPALL-R and Assetwise is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding CP ALL Public and Assetwise Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Assetwise Public and CP ALL 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 CP ALL Public are associated (or correlated) with Assetwise Public. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Assetwise Public has no effect on the direction of CP ALL i.e., CP ALL and Assetwise Public go up and down completely randomly.

Pair Corralation between CP ALL and Assetwise Public

Assuming the 90 days trading horizon CP ALL Public is expected to under-perform the Assetwise Public. In addition to that, CP ALL is 4.56 times more volatile than Assetwise Public. It trades about -0.43 of its total potential returns per unit of risk. Assetwise Public is currently generating about -0.07 per unit of volatility. If you would invest  805.00  in Assetwise Public on September 24, 2024 and sell it today you would lose (5.00) from holding Assetwise Public or give up 0.62% of portfolio value over 90 days.

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

CP ALL Public  vs.  Assetwise Public

CP ALL Public

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days CP ALL Public has generated negative risk-adjusted returns adding no value to investors with long positions. Even with weak performance in the last few months, the Stock's essential indicators remain relatively invariable which may send shares a bit higher in January 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Assetwise Public

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Assetwise Public are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite quite persistent basic indicators, Assetwise Public is not utilizing all of its potentials. The current stock price mess, may contribute to short-term losses for the institutional investors.

Pair Trading with CP ALL and Assetwise Public

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

The idea behind CP ALL Public and Assetwise Public 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.

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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.