Correlation Between Caldwell Partners and RecruiterCom

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

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

Diversification Opportunities for Caldwell Partners and RecruiterCom

0.03

Correlation Coefficient

Caldwell Partners  RecruiterCom

Significant diversification

The 3 months correlation between Caldwell and RecruiterCom is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding The Caldwell Partners and RecruiterCom Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on RecruiterCom Group and Caldwell Partners 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 The Caldwell Partners are associated (or correlated) with RecruiterCom. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of RecruiterCom Group has no effect on the direction of Caldwell Partners i.e., Caldwell Partners and RecruiterCom go up and down completely randomly.

Pair Corralation between Caldwell Partners and RecruiterCom

Assuming the 90 days horizon Caldwell Partners is expected to generate 119.83 times less return on investment than RecruiterCom. But when comparing it to its historical volatility, The Caldwell Partners is 1.65 times less risky than RecruiterCom. It trades about 0.01 of its potential returns per unit of risk. RecruiterCom Group is currently generating about 0.44 of returns per unit of risk over similar time horizon. If you would invest  189.00  in RecruiterCom Group on September 4, 2024 and sell it today you would earn a total of  85.00  from holding RecruiterCom Group or generate 44.97% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	31.25%
Values	Daily Returns

The Caldwell Partners  vs.  RecruiterCom Group

Caldwell Partners

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days The Caldwell Partners has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Caldwell Partners is not utilizing all of its potentials. The latest stock price disturbance, may contribute to mid-run losses for the stockholders.

RecruiterCom Group

Risk-Adjusted Performance

0 of 100

Very Strong

Over the last 90 days RecruiterCom Group has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively fragile basic indicators, RecruiterCom unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Caldwell Partners and RecruiterCom

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

The idea behind The Caldwell Partners and RecruiterCom Group 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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.