Correlation Between GS Retail and Macromill Embrain
Can any of the company-specific risk be diversified away by investing in both GS Retail and Macromill Embrain 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 Macromill Embrain 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 Macromill Embrain Co, you can compare the effects of market volatilities on GS Retail and Macromill Embrain 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 Macromill Embrain. Check out your portfolio center. Please also check ongoing floating volatility patterns of GS Retail and Macromill Embrain.
Diversification Opportunities for GS Retail and Macromill Embrain
-0.42 | Correlation Coefficient |
Very good diversification
The 3 months correlation between 007070 and Macromill is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding GS Retail Co and Macromill Embrain Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Macromill Embrain 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 Macromill Embrain. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Macromill Embrain has no effect on the direction of GS Retail i.e., GS Retail and Macromill Embrain go up and down completely randomly.
Pair Corralation between GS Retail and Macromill Embrain
Assuming the 90 days trading horizon GS Retail Co is expected to generate 1.04 times more return on investment than Macromill Embrain. However, GS Retail is 1.04 times more volatile than Macromill Embrain Co. It trades about 0.02 of its potential returns per unit of risk. Macromill Embrain Co is currently generating about -0.07 per unit of risk. If you would invest 2,101,498 in GS Retail Co on September 12, 2024 and sell it today you would earn a total of 213,502 from holding GS Retail Co or generate 10.16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 97.36% |
| Values | Daily Returns |
GS Retail Co vs. Macromill Embrain Co
Performance |
| Timeline |
| GS Retail |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Insignificant
| Macromill Embrain |
GS Retail and Macromill Embrain Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GS Retail and Macromill Embrain
The main advantage of trading using opposite GS Retail and Macromill Embrain positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GS Retail position performs unexpectedly, Macromill Embrain 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 Macromill Embrain will offset losses from the drop in Macromill Embrain's long position.| GS Retail vs. Samsung Electronics Co | GS Retail vs. Samsung Electronics Co | GS Retail vs. SK Hynix | GS Retail vs. POSCO Holdings |
| Macromill Embrain vs. Samsung Electronics Co | Macromill Embrain vs. Samsung Electronics Co | Macromill Embrain vs. LG Energy Solution | Macromill Embrain vs. SK Hynix |
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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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