Correlation Between Alton Sports and GS Engineering
Can any of the company-specific risk be diversified away by investing in both Alton Sports and GS Engineering 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 Alton Sports and GS Engineering into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Alton Sports CoLtd and GS Engineering Construction, you can compare the effects of market volatilities on Alton Sports and GS Engineering 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 Alton Sports with a short position of GS Engineering. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alton Sports and GS Engineering.
Diversification Opportunities for Alton Sports and GS Engineering
-0.17 | Correlation Coefficient |
Good diversification
The 3 months correlation between Alton and 006360 is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding Alton Sports CoLtd and GS Engineering Construction in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GS Engineering Const and Alton Sports 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 Alton Sports CoLtd are associated (or correlated) with GS Engineering. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GS Engineering Const has no effect on the direction of Alton Sports i.e., Alton Sports and GS Engineering go up and down completely randomly.
Pair Corralation between Alton Sports and GS Engineering
Assuming the 90 days trading horizon Alton Sports CoLtd is expected to generate 0.43 times more return on investment than GS Engineering. However, Alton Sports CoLtd is 2.33 times less risky than GS Engineering. It trades about 0.27 of its potential returns per unit of risk. GS Engineering Construction is currently generating about 0.08 per unit of risk. If you would invest 144,000 in Alton Sports CoLtd on November 1, 2024 and sell it today you would earn a total of 6,100 from holding Alton Sports CoLtd or generate 4.24% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Alton Sports CoLtd vs. GS Engineering Construction
Performance |
| Timeline |
| Alton Sports CoLtd |
| GS Engineering Const |
Alton Sports and GS Engineering Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Alton Sports and GS Engineering
The main advantage of trading using opposite Alton Sports and GS Engineering positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alton Sports position performs unexpectedly, GS Engineering 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 Engineering will offset losses from the drop in GS Engineering's long position.| Alton Sports vs. Neungyule Education | Alton Sports vs. Songwon Industrial Co | Alton Sports vs. Korea Industrial Co | Alton Sports vs. YeaRimDang Publishing Co |
| GS Engineering vs. Iljin Display | GS Engineering vs. Alton Sports CoLtd | GS Engineering vs. Moadata Co | GS Engineering vs. Lotte Data Communication |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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