Correlation Between Grand Ocean and Avalue Technology
Can any of the company-specific risk be diversified away by investing in both Grand Ocean and Avalue Technology 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 Grand Ocean and Avalue Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Grand Ocean Retail and Avalue Technology, you can compare the effects of market volatilities on Grand Ocean and Avalue Technology 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 Grand Ocean with a short position of Avalue Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Grand Ocean and Avalue Technology.
Diversification Opportunities for Grand Ocean and Avalue Technology
-0.52 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Grand and Avalue is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding Grand Ocean Retail and Avalue Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Avalue Technology and Grand Ocean 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 Grand Ocean Retail are associated (or correlated) with Avalue Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Avalue Technology has no effect on the direction of Grand Ocean i.e., Grand Ocean and Avalue Technology go up and down completely randomly.
Pair Corralation between Grand Ocean and Avalue Technology
Assuming the 90 days trading horizon Grand Ocean Retail is expected to under-perform the Avalue Technology. In addition to that, Grand Ocean is 2.27 times more volatile than Avalue Technology. It trades about -0.07 of its total potential returns per unit of risk. Avalue Technology is currently generating about -0.1 per unit of volatility. If you would invest 10,400 in Avalue Technology on August 28, 2024 and sell it today you would lose (350.00) from holding Avalue Technology or give up 3.37% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Grand Ocean Retail vs. Avalue Technology
Performance |
| Timeline |
| Grand Ocean Retail |
| Avalue Technology |
Grand Ocean and Avalue Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Grand Ocean and Avalue Technology
The main advantage of trading using opposite Grand Ocean and Avalue Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Grand Ocean position performs unexpectedly, Avalue Technology 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 Avalue Technology will offset losses from the drop in Avalue Technology's long position.| Grand Ocean vs. First Steamship Co | Grand Ocean vs. Far Eastern Department | Grand Ocean vs. LongDa Construction Development | Grand Ocean vs. Collins Co |
| Avalue Technology vs. Quanta Computer | Avalue Technology vs. Wiwynn Corp | Avalue Technology vs. Getac Technology Corp | Avalue Technology vs. IEI Integration Corp |
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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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