Correlation Between Grape King and Capital Tip
Can any of the company-specific risk be diversified away by investing in both Grape King and Capital Tip 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 Grape King and Capital Tip into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Grape King Bio and Capital Tip Customized, you can compare the effects of market volatilities on Grape King and Capital Tip 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 Grape King with a short position of Capital Tip. Check out your portfolio center. Please also check ongoing floating volatility patterns of Grape King and Capital Tip.
Diversification Opportunities for Grape King and Capital Tip
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Grape and Capital is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Grape King Bio and Capital Tip Customized in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Capital Tip Customized and Grape King 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 Grape King Bio are associated (or correlated) with Capital Tip. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Capital Tip Customized has no effect on the direction of Grape King i.e., Grape King and Capital Tip go up and down completely randomly.
Pair Corralation between Grape King and Capital Tip
Assuming the 90 days trading horizon Grape King Bio is expected to generate 0.99 times more return on investment than Capital Tip. However, Grape King Bio is 1.01 times less risky than Capital Tip. It trades about 0.13 of its potential returns per unit of risk. Capital Tip Customized is currently generating about -0.21 per unit of risk. If you would invest 15,050 in Grape King Bio on August 29, 2024 and sell it today you would earn a total of 400.00 from holding Grape King Bio or generate 2.66% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Grape King Bio vs. Capital Tip Customized
Performance |
| Timeline |
| Grape King Bio |
| Capital Tip Customized |
Grape King and Capital Tip Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Grape King and Capital Tip
The main advantage of trading using opposite Grape King and Capital Tip positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Grape King position performs unexpectedly, Capital Tip 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 Capital Tip will offset losses from the drop in Capital Tip's long position.| Grape King vs. Standard Foods Corp | Grape King vs. Eclat Textile Co | Grape King vs. Feng Tay Enterprises | Grape King vs. China Steel Chemical |
| Capital Tip vs. YuantaP shares Taiwan Top | Capital Tip vs. Yuanta Daily Taiwan | Capital Tip vs. Cathay Taiwan 5G | Capital Tip vs. Yuanta Daily CSI |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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