Correlation Between Chrysalis Investments and River

Specify exactly 2 symbols:
Can any of the company-specific risk be diversified away by investing in both Chrysalis Investments and River 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 Chrysalis Investments and River into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Chrysalis Investments and River and Mercantile, you can compare the effects of market volatilities on Chrysalis Investments and River 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 Chrysalis Investments with a short position of River. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chrysalis Investments and River.

Diversification Opportunities for Chrysalis Investments and River

0.55
  Correlation Coefficient

Very weak diversification

The 3 months correlation between Chrysalis and River is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding Chrysalis Investments and River and Mercantile in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on River and Mercantile and Chrysalis Investments 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 Chrysalis Investments are associated (or correlated) with River. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of River and Mercantile has no effect on the direction of Chrysalis Investments i.e., Chrysalis Investments and River go up and down completely randomly.

Pair Corralation between Chrysalis Investments and River

Assuming the 90 days trading horizon Chrysalis Investments is expected to generate 1.09 times less return on investment than River. But when comparing it to its historical volatility, Chrysalis Investments is 1.01 times less risky than River. It trades about 0.24 of its potential returns per unit of risk. River and Mercantile is currently generating about 0.26 of returns per unit of risk over similar time horizon. If you would invest  15,900  in River and Mercantile on April 17, 2025 and sell it today you would earn a total of  3,300  from holding River and Mercantile or generate 20.75% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthWeak
Accuracy98.36%
ValuesDaily Returns

Chrysalis Investments  vs.  River and Mercantile

 Performance 
       Timeline  
Chrysalis Investments 

Risk-Adjusted Performance

Solid

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in Chrysalis Investments are ranked lower than 18 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Chrysalis Investments unveiled solid returns over the last few months and may actually be approaching a breakup point.
River and Mercantile 

Risk-Adjusted Performance

Solid

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in River and Mercantile are ranked lower than 20 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, River unveiled solid returns over the last few months and may actually be approaching a breakup point.

Chrysalis Investments and River Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Chrysalis Investments and River

The main advantage of trading using opposite Chrysalis Investments and River positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chrysalis Investments position performs unexpectedly, River 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 River will offset losses from the drop in River's long position.
The idea behind Chrysalis Investments and River and Mercantile 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 the ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.

Other Complementary Tools

Fundamentals Comparison
Compare fundamentals across multiple equities to find investing opportunities
Options Analysis
Analyze and evaluate options and option chains as a potential hedge for your portfolios
Portfolio Volatility
Check portfolio volatility and analyze historical return density to properly model market risk
Funds Screener
Find actively-traded funds from around the world traded on over 30 global exchanges
Equity Analysis
Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities