Correlation Between CK Asset and Mentor Graphics
Can any of the company-specific risk be diversified away by investing in both CK Asset and Mentor Graphics 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 CK Asset and Mentor Graphics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CK Asset Holdings and Mentor Graphics Corp, you can compare the effects of market volatilities on CK Asset and Mentor Graphics 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 CK Asset with a short position of Mentor Graphics. Check out your portfolio center. Please also check ongoing floating volatility patterns of CK Asset and Mentor Graphics.
Diversification Opportunities for CK Asset and Mentor Graphics
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between CHKGF and Mentor is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding CK Asset Holdings and Mentor Graphics Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mentor Graphics Corp and CK Asset 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 CK Asset Holdings are associated (or correlated) with Mentor Graphics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mentor Graphics Corp has no effect on the direction of CK Asset i.e., CK Asset and Mentor Graphics go up and down completely randomly.
Pair Corralation between CK Asset and Mentor Graphics
If you would invest (100.00) in Mentor Graphics Corp on January 19, 2024 and sell it today you would earn a total of 100.00 from holding Mentor Graphics Corp or generate -100.0% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Flat |
Strength | Insignificant |
Accuracy | 0.0% |
Values | Daily Returns |
CK Asset Holdings vs. Mentor Graphics Corp
Performance |
Timeline |
CK Asset Holdings |
Mentor Graphics Corp |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
CK Asset and Mentor Graphics Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with CK Asset and Mentor Graphics
The main advantage of trading using opposite CK Asset and Mentor Graphics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CK Asset position performs unexpectedly, Mentor Graphics 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 Mentor Graphics will offset losses from the drop in Mentor Graphics' long position.The idea behind CK Asset Holdings and Mentor Graphics Corp 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.Mentor Graphics vs. LanzaTech Global | Mentor Graphics vs. AerSale Corp | Mentor Graphics vs. Fair Isaac | Mentor Graphics vs. Cedar Fair LP |
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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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