Correlation Between Total Soft and GS Retail
Can any of the company-specific risk be diversified away by investing in both Total Soft 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 Total Soft and GS Retail into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Total Soft Bank and GS Retail Co, you can compare the effects of market volatilities on Total Soft 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 Total Soft with a short position of GS Retail. Check out your portfolio center. Please also check ongoing floating volatility patterns of Total Soft and GS Retail.
Diversification Opportunities for Total Soft and GS Retail
-0.37 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Total and 007070 is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding Total Soft Bank and GS Retail Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GS Retail and Total Soft 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 Total Soft Bank 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 Total Soft i.e., Total Soft and GS Retail go up and down completely randomly.
Pair Corralation between Total Soft and GS Retail
Assuming the 90 days trading horizon Total Soft Bank is expected to generate 1.64 times more return on investment than GS Retail. However, Total Soft is 1.64 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 -0.02 per unit of risk. If you would invest 452,000 in Total Soft Bank on August 27, 2024 and sell it today you would lose (20,500) from holding Total Soft Bank or give up 4.54% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Total Soft Bank vs. GS Retail Co
Performance |
| Timeline |
| Total Soft Bank |
| GS Retail |
Total Soft and GS Retail Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Total Soft and GS Retail
The main advantage of trading using opposite Total Soft and GS Retail positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Total Soft 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.| Total Soft vs. Posco ICT | Total Soft vs. Devsisters corporation | Total Soft vs. Nice Information Telecommunication | Total Soft vs. InfoBank |
| GS Retail vs. AptaBio Therapeutics | GS Retail vs. Daewoo SBI SPAC | GS Retail vs. Dream Security co | GS Retail vs. Microfriend |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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