Correlation Between Goodway Machine and Cameo Communications
Can any of the company-specific risk be diversified away by investing in both Goodway Machine and Cameo Communications 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 Goodway Machine and Cameo Communications into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Goodway Machine Corp and Cameo Communications, you can compare the effects of market volatilities on Goodway Machine and Cameo Communications 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 Goodway Machine with a short position of Cameo Communications. Check out your portfolio center. Please also check ongoing floating volatility patterns of Goodway Machine and Cameo Communications.
Diversification Opportunities for Goodway Machine and Cameo Communications
0.29 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Goodway and Cameo is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding Goodway Machine Corp and Cameo Communications in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cameo Communications and Goodway Machine 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 Goodway Machine Corp are associated (or correlated) with Cameo Communications. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cameo Communications has no effect on the direction of Goodway Machine i.e., Goodway Machine and Cameo Communications go up and down completely randomly.
Pair Corralation between Goodway Machine and Cameo Communications
Assuming the 90 days trading horizon Goodway Machine Corp is expected to under-perform the Cameo Communications. But the stock apears to be less risky and, when comparing its historical volatility, Goodway Machine Corp is 2.41 times less risky than Cameo Communications. The stock trades about -0.02 of its potential returns per unit of risk. The Cameo Communications is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 1,150 in Cameo Communications on September 13, 2024 and sell it today you would earn a total of 30.00 from holding Cameo Communications or generate 2.61% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Goodway Machine Corp vs. Cameo Communications
Performance |
| Timeline |
| Goodway Machine Corp |
| Cameo Communications |
Goodway Machine and Cameo Communications Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Goodway Machine and Cameo Communications
The main advantage of trading using opposite Goodway Machine and Cameo Communications positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Goodway Machine position performs unexpectedly, Cameo Communications 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 Cameo Communications will offset losses from the drop in Cameo Communications' long position.| Goodway Machine vs. Cameo Communications | Goodway Machine vs. Trade Van Information Services | Goodway Machine vs. WinMate Communication INC | Goodway Machine vs. U Ming Marine Transport |
| Cameo Communications vs. AU Optronics | Cameo Communications vs. Innolux Corp | Cameo Communications vs. Ruentex Development Co | Cameo Communications vs. WiseChip Semiconductor |
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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