Correlation Between Crumbs Bake and SIIC Environment

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

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

Diversification Opportunities for Crumbs Bake and SIIC Environment

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Correlation Coefficient

Crumbs Bake SIIC Environment

Pay attention - limited upside

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

Pair Corralation between Crumbs Bake and SIIC Environment

If you would invest  0.01  in Crumbs Bake Shop on February 28, 2023 and sell it today you would earn a total of  0.00  from holding Crumbs Bake Shop or generate 0.0% return on investment over 90 days.

Crumbs Bake Shop  vs.  SIIC Environment Holdings

Crumbs Bake Shop

Crumbs Performance

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Over the last 90 days Crumbs Bake Shop has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable fundamental drivers, Crumbs Bake is not utilizing all of its potentials. The current stock price agitation, may contribute to short-term losses for the retail investors.

SIIC Environment Holdings

SIIC Performance

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

Pair Trading with Crumbs Bake and SIIC Environment

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

The idea behind Crumbs Bake Shop and SIIC Environment Holdings 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.

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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.