Correlation Between Worldex Industry and GS Retail
Can any of the company-specific risk be diversified away by investing in both Worldex Industry 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 Worldex Industry and GS Retail into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Worldex Industry Trading and GS Retail Co, you can compare the effects of market volatilities on Worldex Industry 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 Worldex Industry with a short position of GS Retail. Check out your portfolio center. Please also check ongoing floating volatility patterns of Worldex Industry and GS Retail.
Diversification Opportunities for Worldex Industry and GS Retail
0.31 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Worldex and 007070 is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding Worldex Industry Trading and GS Retail Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GS Retail and Worldex Industry 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 Worldex Industry Trading 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 Worldex Industry i.e., Worldex Industry and GS Retail go up and down completely randomly.
Pair Corralation between Worldex Industry and GS Retail
Assuming the 90 days trading horizon Worldex Industry Trading is expected to under-perform the GS Retail. In addition to that, Worldex Industry is 1.23 times more volatile than GS Retail Co. It trades about -0.05 of its total potential returns per unit of risk. GS Retail Co is currently generating about -0.04 per unit of volatility. If you would invest 2,006,190 in GS Retail Co on October 18, 2024 and sell it today you would lose (403,190) from holding GS Retail Co or give up 20.1% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 92.92% |
| Values | Daily Returns |
Worldex Industry Trading vs. GS Retail Co
Performance |
| Timeline |
| Worldex Industry Trading |
| GS Retail |
Worldex Industry and GS Retail Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Worldex Industry and GS Retail
The main advantage of trading using opposite Worldex Industry and GS Retail positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Worldex Industry 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.| Worldex Industry vs. WONIK Materials CoLtd | Worldex Industry vs. SS TECH | Worldex Industry vs. TES Co | Worldex Industry vs. LEENO Industrial |
| GS Retail vs. Heungkuk Metaltech CoLtd | GS Retail vs. Kbi Metal Co | GS Retail vs. Worldex Industry Trading | GS Retail vs. Woori Technology Investment |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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