Correlation Between GS Retail and JC Chemical
Can any of the company-specific risk be diversified away by investing in both GS Retail and JC Chemical 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 JC Chemical 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 JC Chemical Co, you can compare the effects of market volatilities on GS Retail and JC Chemical 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 JC Chemical. Check out your portfolio center. Please also check ongoing floating volatility patterns of GS Retail and JC Chemical.
Diversification Opportunities for GS Retail and JC Chemical
0.28 | Correlation Coefficient |
Modest diversification
The 3 months correlation between 007070 and 137950 is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding GS Retail Co and JC Chemical Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JC Chemical 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 JC Chemical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of JC Chemical has no effect on the direction of GS Retail i.e., GS Retail and JC Chemical go up and down completely randomly.
Pair Corralation between GS Retail and JC Chemical
Assuming the 90 days trading horizon GS Retail Co is expected to under-perform the JC Chemical. But the stock apears to be less risky and, when comparing its historical volatility, GS Retail Co is 1.16 times less risky than JC Chemical. The stock trades about -0.54 of its potential returns per unit of risk. The JC Chemical Co is currently generating about -0.44 of returns per unit of risk over similar time horizon. If you would invest 403,500 in JC Chemical Co on November 6, 2024 and sell it today you would lose (43,000) from holding JC Chemical Co or give up 10.66% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
GS Retail Co vs. JC Chemical Co
Performance |
| Timeline |
| GS Retail |
| JC Chemical |
GS Retail and JC Chemical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GS Retail and JC Chemical
The main advantage of trading using opposite GS Retail and JC Chemical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GS Retail position performs unexpectedly, JC Chemical 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 JC Chemical will offset losses from the drop in JC Chemical's long position.| GS Retail vs. AptaBio Therapeutics | GS Retail vs. Daewoo SBI SPAC | GS Retail vs. Dream Security co | GS Retail vs. Microfriend |
| JC Chemical vs. PJ Metal Co | JC Chemical vs. Daejung Chemicals Metals | JC Chemical vs. CKH Food Health | JC Chemical vs. Daiyang Metal 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 Stocks Directory module to find actively traded stocks across global markets.
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