Correlation Between COLGATE and Tandy Leather
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By analyzing existing cross correlation between COLGATE PALMOLIVE MEDIUM TERM and Tandy Leather Factory, you can compare the effects of market volatilities on COLGATE and Tandy Leather 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 COLGATE with a short position of Tandy Leather. Check out your portfolio center. Please also check ongoing floating volatility patterns of COLGATE and Tandy Leather.
Diversification Opportunities for COLGATE and Tandy Leather
-0.12 | Correlation Coefficient |
Good diversification
The 3 months correlation between COLGATE and Tandy is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding COLGATE PALMOLIVE MEDIUM TERM and Tandy Leather Factory in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tandy Leather Factory and COLGATE 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 COLGATE PALMOLIVE MEDIUM TERM are associated (or correlated) with Tandy Leather. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tandy Leather Factory has no effect on the direction of COLGATE i.e., COLGATE and Tandy Leather go up and down completely randomly.
Pair Corralation between COLGATE and Tandy Leather
Assuming the 90 days trading horizon COLGATE is expected to generate 3.53 times less return on investment than Tandy Leather. But when comparing it to its historical volatility, COLGATE PALMOLIVE MEDIUM TERM is 2.37 times less risky than Tandy Leather. It trades about 0.11 of its potential returns per unit of risk. Tandy Leather Factory is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest 411.00 in Tandy Leather Factory on September 26, 2024 and sell it today you would earn a total of 62.00 from holding Tandy Leather Factory or generate 15.09% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 90.48% |
Values | Daily Returns |
COLGATE PALMOLIVE MEDIUM TERM vs. Tandy Leather Factory
Performance |
Timeline |
COLGATE PALMOLIVE |
Tandy Leather Factory |
COLGATE and Tandy Leather Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with COLGATE and Tandy Leather
The main advantage of trading using opposite COLGATE and Tandy Leather positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if COLGATE position performs unexpectedly, Tandy Leather 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 Tandy Leather will offset losses from the drop in Tandy Leather's long position.COLGATE vs. Mangazeya Mining | COLGATE vs. Evolution Mining | COLGATE vs. Everspin Technologies | COLGATE vs. Zijin Mining Group |
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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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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