Correlation Between GS Engineering and GaeaSoft Corp
Can any of the company-specific risk be diversified away by investing in both GS Engineering and GaeaSoft Corp 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 GS Engineering and GaeaSoft Corp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GS Engineering Construction and GaeaSoft Corp, you can compare the effects of market volatilities on GS Engineering and GaeaSoft Corp 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 GS Engineering with a short position of GaeaSoft Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of GS Engineering and GaeaSoft Corp.
Diversification Opportunities for GS Engineering and GaeaSoft Corp
0.4 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between 006360 and GaeaSoft is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding GS Engineering Construction and GaeaSoft Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GaeaSoft Corp and GS Engineering 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 GS Engineering Construction are associated (or correlated) with GaeaSoft Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GaeaSoft Corp has no effect on the direction of GS Engineering i.e., GS Engineering and GaeaSoft Corp go up and down completely randomly.
Pair Corralation between GS Engineering and GaeaSoft Corp
Assuming the 90 days trading horizon GS Engineering is expected to generate 1.52 times less return on investment than GaeaSoft Corp. But when comparing it to its historical volatility, GS Engineering Construction is 1.39 times less risky than GaeaSoft Corp. It trades about 0.01 of its potential returns per unit of risk. GaeaSoft Corp is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 906,000 in GaeaSoft Corp on September 2, 2024 and sell it today you would lose (51,000) from holding GaeaSoft Corp or give up 5.63% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
GS Engineering Construction vs. GaeaSoft Corp
Performance |
| Timeline |
| GS Engineering Const |
| GaeaSoft Corp |
GS Engineering and GaeaSoft Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GS Engineering and GaeaSoft Corp
The main advantage of trading using opposite GS Engineering and GaeaSoft Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GS Engineering position performs unexpectedly, GaeaSoft Corp 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 GaeaSoft Corp will offset losses from the drop in GaeaSoft Corp's long position.| GS Engineering vs. AptaBio Therapeutics | GS Engineering vs. Daewoo SBI SPAC | GS Engineering vs. Dream Security co | GS Engineering vs. Microfriend |
| GaeaSoft Corp vs. Dongsin Engineering Construction | GaeaSoft Corp vs. Doosan Fuel Cell | GaeaSoft Corp vs. Daishin Balance 1 | GaeaSoft Corp vs. Total Soft Bank |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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