Correlation Between Grand Ocean and Scan D
Can any of the company-specific risk be diversified away by investing in both Grand Ocean and Scan D 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 Scan D 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 Scan D, you can compare the effects of market volatilities on Grand Ocean and Scan D 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 Scan D. Check out your portfolio center. Please also check ongoing floating volatility patterns of Grand Ocean and Scan D.
Diversification Opportunities for Grand Ocean and Scan D
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Grand and Scan is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Grand Ocean Retail and Scan D in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Scan D 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 Scan D. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Scan D has no effect on the direction of Grand Ocean i.e., Grand Ocean and Scan D go up and down completely randomly.
Pair Corralation between Grand Ocean and Scan D
Assuming the 90 days trading horizon Grand Ocean Retail is expected to under-perform the Scan D. In addition to that, Grand Ocean is 2.24 times more volatile than Scan D. It trades about -0.2 of its total potential returns per unit of risk. Scan D is currently generating about -0.16 per unit of volatility. If you would invest 3,470 in Scan D on October 29, 2024 and sell it today you would lose (100.00) from holding Scan D or give up 2.88% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Grand Ocean Retail vs. Scan D
Performance |
| Timeline |
| Grand Ocean Retail |
| Scan D |
Grand Ocean and Scan D Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Grand Ocean and Scan D
The main advantage of trading using opposite Grand Ocean and Scan D positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Grand Ocean position performs unexpectedly, Scan D 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 Scan D will offset losses from the drop in Scan D'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 |
| Scan D vs. LandMark Optoelectronics | Scan D vs. Asia Metal Industries | Scan D vs. Ligitek Electronics Co | Scan D vs. Sunspring Metal 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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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