Correlation Between Cardlytics and 1933 Industries
Can any of the company-specific risk be diversified away by investing in both Cardlytics and 1933 Industries 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 Cardlytics and 1933 Industries into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cardlytics and 1933 Industries, you can compare the effects of market volatilities on Cardlytics and 1933 Industries 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 Cardlytics with a short position of 1933 Industries. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cardlytics and 1933 Industries.
Diversification Opportunities for Cardlytics and 1933 Industries
0.39 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Cardlytics and 1933 is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding Cardlytics and 1933 Industries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on 1933 Industries and Cardlytics 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 Cardlytics are associated (or correlated) with 1933 Industries. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of 1933 Industries has no effect on the direction of Cardlytics i.e., Cardlytics and 1933 Industries go up and down completely randomly.
Pair Corralation between Cardlytics and 1933 Industries
Given the investment horizon of 90 days Cardlytics is expected to under-perform the 1933 Industries. But the stock apears to be less risky and, when comparing its historical volatility, Cardlytics is 3.38 times less risky than 1933 Industries. The stock trades about -0.16 of its potential returns per unit of risk. The 1933 Industries is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 1.10 in 1933 Industries on January 29, 2024 and sell it today you would earn a total of 0.06 from holding 1933 Industries or generate 5.45% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Cardlytics vs. 1933 Industries
Performance |
Timeline |
Cardlytics |
1933 Industries |
Cardlytics and 1933 Industries Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Cardlytics and 1933 Industries
The main advantage of trading using opposite Cardlytics and 1933 Industries positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cardlytics position performs unexpectedly, 1933 Industries 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 1933 Industries will offset losses from the drop in 1933 Industries' long position.The idea behind Cardlytics and 1933 Industries 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.1933 Industries vs. Delta 9 Cannabis | 1933 Industries vs. Willow Biosciences | 1933 Industries vs. CLS Holdings USA | 1933 Industries vs. Benchmark Botanics |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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