Correlation Between Grape King and Eternal Materials
Can any of the company-specific risk be diversified away by investing in both Grape King and Eternal Materials 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 Eternal Materials 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 Eternal Materials Co, you can compare the effects of market volatilities on Grape King and Eternal Materials 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 Eternal Materials. Check out your portfolio center. Please also check ongoing floating volatility patterns of Grape King and Eternal Materials.
Diversification Opportunities for Grape King and Eternal Materials
-0.17 | Correlation Coefficient |
Good diversification
The 3 months correlation between Grape and Eternal is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding Grape King Bio and Eternal Materials Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eternal Materials 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 Eternal Materials. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eternal Materials has no effect on the direction of Grape King i.e., Grape King and Eternal Materials go up and down completely randomly.
Pair Corralation between Grape King and Eternal Materials
Assuming the 90 days trading horizon Grape King Bio is expected to generate 0.74 times more return on investment than Eternal Materials. However, Grape King Bio is 1.35 times less risky than Eternal Materials. It trades about -0.01 of its potential returns per unit of risk. Eternal Materials Co is currently generating about -0.02 per unit of risk. If you would invest 15,950 in Grape King Bio on September 1, 2024 and sell it today you would lose (450.00) from holding Grape King Bio or give up 2.82% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Grape King Bio vs. Eternal Materials Co
Performance |
| Timeline |
| Grape King Bio |
| Eternal Materials |
Grape King and Eternal Materials Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Grape King and Eternal Materials
The main advantage of trading using opposite Grape King and Eternal Materials positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Grape King position performs unexpectedly, Eternal Materials 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 Eternal Materials will offset losses from the drop in Eternal Materials' 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 |
| Eternal Materials vs. Taiwan Fertilizer Co | Eternal Materials vs. Nan Ya Plastics | Eternal Materials vs. Formosa Chemicals Fibre | Eternal Materials vs. Far Eastern New |
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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
Other Complementary Tools
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk | |
| Volatility Analysis Get historical volatility and risk analysis based on latest market data | |
| Insider Screener Find insiders across different sectors to evaluate their impact on performance | |
| AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities | |
| Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios |