Correlation Between Great Wall and Oceanic Beverages
Can any of the company-specific risk be diversified away by investing in both Great Wall and Oceanic Beverages 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 Great Wall and Oceanic Beverages into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Great Wall Enterprise and Oceanic Beverages Co, you can compare the effects of market volatilities on Great Wall and Oceanic Beverages 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 Great Wall with a short position of Oceanic Beverages. Check out your portfolio center. Please also check ongoing floating volatility patterns of Great Wall and Oceanic Beverages.
Diversification Opportunities for Great Wall and Oceanic Beverages
-0.19 | Correlation Coefficient |
Good diversification
The 3 months correlation between Great and Oceanic is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding Great Wall Enterprise and Oceanic Beverages Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Oceanic Beverages and Great Wall 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 Great Wall Enterprise are associated (or correlated) with Oceanic Beverages. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Oceanic Beverages has no effect on the direction of Great Wall i.e., Great Wall and Oceanic Beverages go up and down completely randomly.
Pair Corralation between Great Wall and Oceanic Beverages
Assuming the 90 days trading horizon Great Wall Enterprise is expected to generate 0.33 times more return on investment than Oceanic Beverages. However, Great Wall Enterprise is 3.02 times less risky than Oceanic Beverages. It trades about 0.31 of its potential returns per unit of risk. Oceanic Beverages Co is currently generating about 0.01 per unit of risk. If you would invest 5,120 in Great Wall Enterprise on September 1, 2024 and sell it today you would earn a total of 210.00 from holding Great Wall Enterprise or generate 4.1% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Great Wall Enterprise vs. Oceanic Beverages Co
Performance |
| Timeline |
| Great Wall Enterprise |
| Oceanic Beverages |
Great Wall and Oceanic Beverages Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Great Wall and Oceanic Beverages
The main advantage of trading using opposite Great Wall and Oceanic Beverages positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Great Wall position performs unexpectedly, Oceanic Beverages 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 Oceanic Beverages will offset losses from the drop in Oceanic Beverages' long position.| Great Wall vs. De Licacy Industrial | Great Wall vs. Wisher Industrial Co | Great Wall vs. Tainan Enterprises Co |
| Oceanic Beverages vs. De Licacy Industrial | Oceanic Beverages vs. Wisher Industrial Co | Oceanic Beverages vs. Tainan Enterprises 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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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