Correlation Between GS Engineering and SPG
Can any of the company-specific risk be diversified away by investing in both GS Engineering and SPG 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 SPG 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 SPG Co, you can compare the effects of market volatilities on GS Engineering and SPG 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 SPG. Check out your portfolio center. Please also check ongoing floating volatility patterns of GS Engineering and SPG.
Diversification Opportunities for GS Engineering and SPG
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between 006360 and SPG is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding GS Engineering Construction and SPG Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SPG Co 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 SPG. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SPG Co has no effect on the direction of GS Engineering i.e., GS Engineering and SPG go up and down completely randomly.
Pair Corralation between GS Engineering and SPG
Assuming the 90 days trading horizon GS Engineering is expected to generate 1.12 times less return on investment than SPG. But when comparing it to its historical volatility, GS Engineering Construction is 1.33 times less risky than SPG. It trades about 0.21 of its potential returns per unit of risk. SPG Co is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest 2,080,000 in SPG Co on August 31, 2024 and sell it today you would earn a total of 230,000 from holding SPG Co or generate 11.06% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.65% |
| Values | Daily Returns |
GS Engineering Construction vs. SPG Co
Performance |
| Timeline |
| GS Engineering Const |
| SPG Co |
GS Engineering and SPG Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GS Engineering and SPG
The main advantage of trading using opposite GS Engineering and SPG positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GS Engineering position performs unexpectedly, SPG 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 SPG will offset losses from the drop in SPG's long position.| GS Engineering vs. AptaBio Therapeutics | GS Engineering vs. Daewoo SBI SPAC | GS Engineering vs. Dream Security co | GS Engineering vs. Microfriend |
| SPG vs. Namhwa Industrial Co | SPG vs. GS Engineering Construction | SPG vs. Daelim Industrial Co | SPG vs. Eagon Industrial Co |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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