Correlation Between Booking CDR and Headwater Exploration
Can any of the company-specific risk be diversified away by investing in both Booking CDR and Headwater Exploration 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 Booking CDR and Headwater Exploration into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Booking CDR and Headwater Exploration, you can compare the effects of market volatilities on Booking CDR and Headwater Exploration 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 Booking CDR with a short position of Headwater Exploration. Check out your portfolio center. Please also check ongoing floating volatility patterns of Booking CDR and Headwater Exploration.
Diversification Opportunities for Booking CDR and Headwater Exploration
-0.7 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Booking and Headwater is -0.7. Overlapping area represents the amount of risk that can be diversified away by holding Booking CDR and Headwater Exploration in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Headwater Exploration and Booking CDR 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 Booking CDR are associated (or correlated) with Headwater Exploration. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Headwater Exploration has no effect on the direction of Booking CDR i.e., Booking CDR and Headwater Exploration go up and down completely randomly.
Pair Corralation between Booking CDR and Headwater Exploration
Assuming the 90 days trading horizon Booking CDR is expected to under-perform the Headwater Exploration. But the stock apears to be less risky and, when comparing its historical volatility, Booking CDR is 1.13 times less risky than Headwater Exploration. The stock trades about -0.09 of its potential returns per unit of risk. The Headwater Exploration is currently generating about 0.23 of returns per unit of risk over similar time horizon. If you would invest 677.00 in Headwater Exploration on September 1, 2025 and sell it today you would earn a total of 215.00 from holding Headwater Exploration or generate 31.76% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Booking CDR vs. Headwater Exploration
Performance |
| Timeline |
| Booking CDR |
| Headwater Exploration |
Booking CDR and Headwater Exploration Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Booking CDR and Headwater Exploration
The main advantage of trading using opposite Booking CDR and Headwater Exploration positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Booking CDR position performs unexpectedly, Headwater Exploration 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 Headwater Exploration will offset losses from the drop in Headwater Exploration's long position.| Booking CDR vs. Gfl Environmental Holdings | Booking CDR vs. Organto Foods Incorporated | Booking CDR vs. High Liner Foods | Booking CDR vs. Plantify Foods |
| Headwater Exploration vs. Quipt Home Medical | Headwater Exploration vs. Homerun Resources | Headwater Exploration vs. Omineca Mining and | Headwater Exploration vs. NeXGold Mining Corp |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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