Correlation Between Global Standard and Alton Sports
Can any of the company-specific risk be diversified away by investing in both Global Standard and Alton Sports 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 Global Standard and Alton Sports into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Global Standard Technology and Alton Sports CoLtd, you can compare the effects of market volatilities on Global Standard and Alton Sports 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 Global Standard with a short position of Alton Sports. Check out your portfolio center. Please also check ongoing floating volatility patterns of Global Standard and Alton Sports.
Diversification Opportunities for Global Standard and Alton Sports
0.41 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Global and Alton is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding Global Standard Technology and Alton Sports CoLtd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alton Sports CoLtd and Global Standard 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 Global Standard Technology are associated (or correlated) with Alton Sports. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alton Sports CoLtd has no effect on the direction of Global Standard i.e., Global Standard and Alton Sports go up and down completely randomly.
Pair Corralation between Global Standard and Alton Sports
Assuming the 90 days trading horizon Global Standard Technology is expected to generate 2.92 times more return on investment than Alton Sports. However, Global Standard is 2.92 times more volatile than Alton Sports CoLtd. It trades about 0.06 of its potential returns per unit of risk. Alton Sports CoLtd is currently generating about -0.42 per unit of risk. If you would invest 1,526,000 in Global Standard Technology on August 29, 2024 and sell it today you would earn a total of 46,000 from holding Global Standard Technology or generate 3.01% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Global Standard Technology vs. Alton Sports CoLtd
Performance |
| Timeline |
| Global Standard Tech |
| Alton Sports CoLtd |
Global Standard and Alton Sports Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Global Standard and Alton Sports
The main advantage of trading using opposite Global Standard and Alton Sports positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Global Standard position performs unexpectedly, Alton Sports 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 Alton Sports will offset losses from the drop in Alton Sports' long position.| Global Standard vs. Korea Real Estate | Global Standard vs. Korea Ratings Co | Global Standard vs. IQuest Co | Global Standard vs. Wonbang Tech Co |
| Alton Sports vs. Busan Industrial Co | Alton Sports vs. Busan Ind | Alton Sports vs. Mirae Asset Daewoo | Alton Sports vs. UNISEM 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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.
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