Correlation Between GiantStep and RaemongRaein
Can any of the company-specific risk be diversified away by investing in both GiantStep and RaemongRaein 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 GiantStep and RaemongRaein into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GiantStep Co and RaemongRaein Co, you can compare the effects of market volatilities on GiantStep and RaemongRaein 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 GiantStep with a short position of RaemongRaein. Check out your portfolio center. Please also check ongoing floating volatility patterns of GiantStep and RaemongRaein.
Diversification Opportunities for GiantStep and RaemongRaein
-0.17 | Correlation Coefficient |
Good diversification
The 3 months correlation between GiantStep and RaemongRaein is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding GiantStep Co and RaemongRaein Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on RaemongRaein and GiantStep 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 GiantStep Co are associated (or correlated) with RaemongRaein. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of RaemongRaein has no effect on the direction of GiantStep i.e., GiantStep and RaemongRaein go up and down completely randomly.
Pair Corralation between GiantStep and RaemongRaein
Assuming the 90 days trading horizon GiantStep Co is expected to under-perform the RaemongRaein. But the stock apears to be less risky and, when comparing its historical volatility, GiantStep Co is 1.31 times less risky than RaemongRaein. The stock trades about -0.05 of its potential returns per unit of risk. The RaemongRaein Co is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 1,260,000 in RaemongRaein Co on September 12, 2024 and sell it today you would earn a total of 289,000 from holding RaemongRaein Co or generate 22.94% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
GiantStep Co vs. RaemongRaein Co
Performance |
| Timeline |
| GiantStep |
| RaemongRaein |
GiantStep and RaemongRaein Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GiantStep and RaemongRaein
The main advantage of trading using opposite GiantStep and RaemongRaein positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GiantStep position performs unexpectedly, RaemongRaein 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 RaemongRaein will offset losses from the drop in RaemongRaein's long position.| GiantStep vs. Haitai Confectionery Foods | GiantStep vs. Cloud Air CoLtd | GiantStep vs. FoodNamoo | GiantStep vs. Sempio Foods Co |
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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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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