Correlation Between Chase and Balchem

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

By analyzing existing cross correlation between Chase and Balchem, you can compare the effects of market volatilities on Chase and Balchem 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 Chase with a short position of Balchem. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chase and Balchem.

Diversification Opportunities for Chase and Balchem

-0.79

Correlation Coefficient

Chase  Balchem

Pay attention - limited upside

The 1 month correlation between Chase and Balchem is -0.79. Overlapping area represents the amount of risk that can be diversified away by holding Chase and Balchem in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Balchem and Chase 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 Chase are associated (or correlated) with Balchem. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Balchem has no effect on the direction of Chase i.e., Chase and Balchem go up and down completely randomly.

Pair Corralation between Chase and Balchem

If you would invest  12,749  in Chase on January 24, 2024 and sell it today you would earn a total of  0.00  from holding Chase or generate 0.0% return on investment over 90 days.

Time Period	1 Month [change]
Direction	Moves Against
Strength	Weak
Accuracy	2.38%
Values	Daily Returns

Chase  vs.  Balchem

Chase

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Chase has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable fundamental indicators, Chase is not utilizing all of its potentials. The latest stock price disturbance, may contribute to mid-run losses for the stockholders.

Balchem

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Balchem has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's basic indicators remain rather sound which may send shares a bit higher in May 2024. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Pair Trading with Chase and Balchem

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

The idea behind Chase and Balchem 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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.