Correlation Between GS Retail and Asia Economy
Can any of the company-specific risk be diversified away by investing in both GS Retail and Asia Economy 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 Retail and Asia Economy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GS Retail Co and Asia Economy Daily, you can compare the effects of market volatilities on GS Retail and Asia Economy 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 Retail with a short position of Asia Economy. Check out your portfolio center. Please also check ongoing floating volatility patterns of GS Retail and Asia Economy.
Diversification Opportunities for GS Retail and Asia Economy
-0.72 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between 007070 and Asia is -0.72. Overlapping area represents the amount of risk that can be diversified away by holding GS Retail Co and Asia Economy Daily in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Asia Economy Daily and GS Retail 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 Retail Co are associated (or correlated) with Asia Economy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Asia Economy Daily has no effect on the direction of GS Retail i.e., GS Retail and Asia Economy go up and down completely randomly.
Pair Corralation between GS Retail and Asia Economy
Assuming the 90 days trading horizon GS Retail Co is expected to under-perform the Asia Economy. But the stock apears to be less risky and, when comparing its historical volatility, GS Retail Co is 1.74 times less risky than Asia Economy. The stock trades about -0.48 of its potential returns per unit of risk. The Asia Economy Daily is currently generating about -0.25 of returns per unit of risk over similar time horizon. If you would invest 171,900 in Asia Economy Daily on November 3, 2024 and sell it today you would lose (17,100) from holding Asia Economy Daily or give up 9.95% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
GS Retail Co vs. Asia Economy Daily
Performance |
| Timeline |
| GS Retail |
| Asia Economy Daily |
GS Retail and Asia Economy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GS Retail and Asia Economy
The main advantage of trading using opposite GS Retail and Asia Economy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GS Retail position performs unexpectedly, Asia Economy 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 Asia Economy will offset losses from the drop in Asia Economy's long position.| GS Retail vs. Samyoung Electronics Co | GS Retail vs. Sungmoon Electronics Co | GS Retail vs. Daishin Information Communications | GS Retail vs. Nice Information Telecommunication |
| Asia Economy vs. Hyundai Engineering Construction | Asia Economy vs. Youl Chon Chemical | Asia Economy vs. Kukdong Oil Chemicals | Asia Economy vs. Dongwoo Farm To |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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