Correlation Between Real Goods and Cadus

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

Diversification Opportunities for Real Goods and Cadus

0.0
  Correlation Coefficient

Pay attention - limited upside

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

Pair Corralation between Real Goods and Cadus

If you would invest (100.00) in Cadus on December 30, 2023 and sell it today you would earn a total of  100.00  from holding Cadus or generate -100.0% return on investment over 90 days.
Time Period3 Months [change]
DirectionFlat 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

Real Goods Solar  vs.  Cadus

 Performance 
       Timeline  
Real Goods Solar 

Risk-Adjusted Performance

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Very Weak
Over the last 90 days Real Goods Solar has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, Real Goods is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.
Cadus 

Risk-Adjusted Performance

0 of 100

 
Low
 
High
Very Weak
Over the last 90 days Cadus has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Cadus is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Real Goods and Cadus Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Real Goods and Cadus

The main advantage of trading using opposite Real Goods and Cadus positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Real Goods position performs unexpectedly, Cadus 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 Cadus will offset losses from the drop in Cadus' long position.
The idea behind Real Goods Solar and Cadus 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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.

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