Correlation Between Grandblue Environment and New Hope
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By analyzing existing cross correlation between Grandblue Environment Co and New Hope Dairy, you can compare the effects of market volatilities on Grandblue Environment and New Hope 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 Grandblue Environment with a short position of New Hope. Check out your portfolio center. Please also check ongoing floating volatility patterns of Grandblue Environment and New Hope.
Diversification Opportunities for Grandblue Environment and New Hope
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Grandblue and New is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Grandblue Environment Co and New Hope Dairy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on New Hope Dairy and Grandblue Environment 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 Grandblue Environment Co are associated (or correlated) with New Hope. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of New Hope Dairy has no effect on the direction of Grandblue Environment i.e., Grandblue Environment and New Hope go up and down completely randomly.
Pair Corralation between Grandblue Environment and New Hope
Assuming the 90 days trading horizon Grandblue Environment is expected to generate 1.78 times less return on investment than New Hope. But when comparing it to its historical volatility, Grandblue Environment Co is 2.76 times less risky than New Hope. It trades about 0.29 of its potential returns per unit of risk. New Hope Dairy is currently generating about 0.19 of returns per unit of risk over similar time horizon. If you would invest 1,240 in New Hope Dairy on September 26, 2024 and sell it today you would earn a total of 188.00 from holding New Hope Dairy or generate 15.16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Grandblue Environment Co vs. New Hope Dairy
Performance |
| Timeline |
| Grandblue Environment |
| New Hope Dairy |
Grandblue Environment and New Hope Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Grandblue Environment and New Hope
The main advantage of trading using opposite Grandblue Environment and New Hope positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Grandblue Environment position performs unexpectedly, New Hope 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 New Hope will offset losses from the drop in New Hope's long position.The idea behind Grandblue Environment Co and New Hope Dairy pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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