Correlation Between Green Cross and Alton Sports
Can any of the company-specific risk be diversified away by investing in both Green Cross 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 Green Cross and Alton Sports into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Green Cross Medical and Alton Sports CoLtd, you can compare the effects of market volatilities on Green Cross 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 Green Cross with a short position of Alton Sports. Check out your portfolio center. Please also check ongoing floating volatility patterns of Green Cross and Alton Sports.
Diversification Opportunities for Green Cross and Alton Sports
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Green and Alton is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Green Cross Medical 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 Green Cross 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 Green Cross Medical 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 Green Cross i.e., Green Cross and Alton Sports go up and down completely randomly.
Pair Corralation between Green Cross and Alton Sports
Assuming the 90 days trading horizon Green Cross Medical is expected to generate 2.01 times more return on investment than Alton Sports. However, Green Cross is 2.01 times more volatile than Alton Sports CoLtd. It trades about 0.07 of its potential returns per unit of risk. Alton Sports CoLtd is currently generating about -0.04 per unit of risk. If you would invest 390,000 in Green Cross Medical on October 14, 2024 and sell it today you would earn a total of 49,000 from holding Green Cross Medical or generate 12.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Green Cross Medical vs. Alton Sports CoLtd
Performance |
| Timeline |
| Green Cross Medical |
| Alton Sports CoLtd |
Green Cross and Alton Sports Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Green Cross and Alton Sports
The main advantage of trading using opposite Green Cross and Alton Sports positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Green Cross 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.| Green Cross vs. KB Financial Group | Green Cross vs. Koryo Credit Information | Green Cross vs. Genie Music | Green Cross vs. Jb Financial |
| Alton Sports vs. Green Cross Medical | Alton Sports vs. Haitai Confectionery Foods | Alton Sports vs. Sempio Foods Co | Alton Sports vs. Lotte Non Life Insurance |
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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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