Correlation Between 06417XAG6 and ChampionX

Can any of the company-specific risk be diversified away by investing in both 06417XAG6 and ChampionX 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 06417XAG6 and ChampionX into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between BNS 4588 04 MAY 37 and ChampionX, you can compare the effects of market volatilities on 06417XAG6 and ChampionX 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 06417XAG6 with a short position of ChampionX. Check out your portfolio center. Please also check ongoing floating volatility patterns of 06417XAG6 and ChampionX.

Diversification Opportunities for 06417XAG6 and ChampionX

0.19

Correlation Coefficient

06417XAG6  ChampionX

Average diversification

The 3 months correlation between 06417XAG6 and ChampionX is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding BNS 4588 04 MAY 37 and ChampionX in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ChampionX and 06417XAG6 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 BNS 4588 04 MAY 37 are associated (or correlated) with ChampionX. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ChampionX has no effect on the direction of 06417XAG6 i.e., 06417XAG6 and ChampionX go up and down completely randomly.

Pair Corralation between 06417XAG6 and ChampionX

Assuming the 90 days trading horizon BNS 4588 04 MAY 37 is expected to under-perform the ChampionX. But the bond apears to be less risky and, when comparing its historical volatility, BNS 4588 04 MAY 37 is 2.51 times less risky than ChampionX. The bond trades about -0.1 of its potential returns per unit of risk. The ChampionX is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest  2,897  in ChampionX on September 14, 2024 and sell it today you would earn a total of  56.00  from holding ChampionX or generate 1.93% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	92.06%
Values	Daily Returns

BNS 4588 04 MAY 37  vs.  ChampionX

BNS 4588 04

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days BNS 4588 04 MAY 37 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, 06417XAG6 is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

ChampionX

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in ChampionX are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of fairly strong technical indicators, ChampionX is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with 06417XAG6 and ChampionX

The main advantage of trading using opposite 06417XAG6 and ChampionX positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if 06417XAG6 position performs unexpectedly, ChampionX 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 ChampionX will offset losses from the drop in ChampionX's long position.

The idea behind BNS 4588 04 MAY 37 and ChampionX 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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.