Correlation Between CCA Industries and Unilever PLC

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Can any of the company-specific risk be diversified away by investing in both CCA Industries and Unilever PLC 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 CCA Industries and Unilever PLC into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CCA Industries and Unilever PLC, you can compare the effects of market volatilities on CCA Industries and Unilever PLC 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 CCA Industries with a short position of Unilever PLC. Check out your portfolio center. Please also check ongoing floating volatility patterns of CCA Industries and Unilever PLC.

Diversification Opportunities for CCA Industries and Unilever PLC

0.0
  Correlation Coefficient

Pay attention - limited upside

The 3 months correlation between CCA and Unilever is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding CCA Industries and Unilever PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Unilever PLC and CCA Industries 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 CCA Industries are associated (or correlated) with Unilever PLC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Unilever PLC has no effect on the direction of CCA Industries i.e., CCA Industries and Unilever PLC go up and down completely randomly.

Pair Corralation between CCA Industries and Unilever PLC

If you would invest (100.00) in Unilever PLC on December 29, 2023 and sell it today you would earn a total of  100.00  from holding Unilever PLC or generate -100.0% return on investment over 90 days.
Time Period3 Months [change]
DirectionFlat 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

CCA Industries  vs.  Unilever PLC

 Performance 
       Timeline  
CCA Industries 

Risk-Adjusted Performance

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Over the last 90 days CCA Industries has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, CCA Industries is not utilizing all of its potentials. The recent stock price fuss, may contribute to near-short-term losses for the sophisticated investors.
Unilever PLC 

Risk-Adjusted Performance

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Low
 
High
Very Weak
Over the last 90 days Unilever PLC has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, Unilever PLC is not utilizing all of its potentials. The current stock price disarray, may contribute to short-term losses for the investors.

CCA Industries and Unilever PLC Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with CCA Industries and Unilever PLC

The main advantage of trading using opposite CCA Industries and Unilever PLC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CCA Industries position performs unexpectedly, Unilever PLC 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 Unilever PLC will offset losses from the drop in Unilever PLC's long position.
The idea behind CCA Industries and Unilever PLC 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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.

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