Correlation Between Cloud Air and GS Retail
Can any of the company-specific risk be diversified away by investing in both Cloud Air and GS Retail 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 Cloud Air and GS Retail into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cloud Air CoLtd and GS Retail Co, you can compare the effects of market volatilities on Cloud Air and GS Retail 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 Cloud Air with a short position of GS Retail. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cloud Air and GS Retail.
Diversification Opportunities for Cloud Air and GS Retail
Significant diversification
The 3 months correlation between Cloud and 007070 is 0.02. Overlapping area represents the amount of risk that can be diversified away by holding Cloud Air CoLtd and GS Retail Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GS Retail and Cloud Air 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 Cloud Air CoLtd are associated (or correlated) with GS Retail. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GS Retail has no effect on the direction of Cloud Air i.e., Cloud Air and GS Retail go up and down completely randomly.
Pair Corralation between Cloud Air and GS Retail
Assuming the 90 days trading horizon Cloud Air CoLtd is expected to generate 1.33 times more return on investment than GS Retail. However, Cloud Air is 1.33 times more volatile than GS Retail Co. It trades about 0.01 of its potential returns per unit of risk. GS Retail Co is currently generating about -0.06 per unit of risk. If you would invest 87,300 in Cloud Air CoLtd on October 29, 2024 and sell it today you would lose (1,800) from holding Cloud Air CoLtd or give up 2.06% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 96.14% |
| Values | Daily Returns |
Cloud Air CoLtd vs. GS Retail Co
Performance |
| Timeline |
| Cloud Air CoLtd |
| GS Retail |
Cloud Air and GS Retail Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cloud Air and GS Retail
The main advantage of trading using opposite Cloud Air and GS Retail positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cloud Air position performs unexpectedly, GS Retail 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 GS Retail will offset losses from the drop in GS Retail's long position.| Cloud Air vs. Dgb Financial | Cloud Air vs. DB Insurance Co | Cloud Air vs. LG Display Co | Cloud Air vs. InfoBank |
| GS Retail vs. KB Financial Group | GS Retail vs. Shinhan Financial Group | GS Retail vs. Hana Financial | GS Retail vs. Woori Financial Group |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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