Correlation Between PLAY2CHILL and CSX

Can any of the company-specific risk be diversified away by investing in both PLAY2CHILL and CSX 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 PLAY2CHILL and CSX into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between PLAY2CHILL SA ZY and CSX Corporation, you can compare the effects of market volatilities on PLAY2CHILL and CSX 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 PLAY2CHILL with a short position of CSX. Check out your portfolio center. Please also check ongoing floating volatility patterns of PLAY2CHILL and CSX.

Diversification Opportunities for PLAY2CHILL and CSX

0.67

Correlation Coefficient

PLAY2CHILL  CSX

Poor diversification

The 3 months correlation between PLAY2CHILL and CSX is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding PLAY2CHILL SA ZY and CSX Corp. in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CSX Corporation and PLAY2CHILL 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 PLAY2CHILL SA ZY are associated (or correlated) with CSX. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CSX Corporation has no effect on the direction of PLAY2CHILL i.e., PLAY2CHILL and CSX go up and down completely randomly.

Pair Corralation between PLAY2CHILL and CSX

Assuming the 90 days horizon PLAY2CHILL SA ZY is expected to generate 2.7 times more return on investment than CSX. However, PLAY2CHILL is 2.7 times more volatile than CSX Corporation. It trades about 0.16 of its potential returns per unit of risk. CSX Corporation is currently generating about 0.27 per unit of risk. If you would invest  62.00  in PLAY2CHILL SA ZY on April 22, 2025 and sell it today you would earn a total of  28.00  from holding PLAY2CHILL SA ZY or generate 45.16% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	98.44%
Values	Daily Returns

PLAY2CHILL SA ZY  vs.  CSX Corp.

PLAY2CHILL SA ZY

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in PLAY2CHILL SA ZY are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite nearly uncertain basic indicators, PLAY2CHILL reported solid returns over the last few months and may actually be approaching a breakup point.

CSX Corporation

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in CSX Corporation are ranked lower than 21 (%) of all global equities and portfolios over the last 90 days. Despite nearly uncertain basic indicators, CSX reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with PLAY2CHILL and CSX

The main advantage of trading using opposite PLAY2CHILL and CSX positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PLAY2CHILL position performs unexpectedly, CSX 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 CSX will offset losses from the drop in CSX's long position.

The idea behind PLAY2CHILL SA ZY and CSX Corporation 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 Global Correlations module to find global opportunities by holding instruments from different markets.