Correlation Between Capital Securities and Grand Fortune
Can any of the company-specific risk be diversified away by investing in both Capital Securities and Grand Fortune 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 Capital Securities and Grand Fortune into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Capital Securities Corp and Grand Fortune Securities, you can compare the effects of market volatilities on Capital Securities and Grand Fortune 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 Capital Securities with a short position of Grand Fortune. Check out your portfolio center. Please also check ongoing floating volatility patterns of Capital Securities and Grand Fortune.
Diversification Opportunities for Capital Securities and Grand Fortune
-0.32 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Capital and Grand is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding Capital Securities Corp and Grand Fortune Securities in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Grand Fortune Securities and Capital Securities 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 Capital Securities Corp are associated (or correlated) with Grand Fortune. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Grand Fortune Securities has no effect on the direction of Capital Securities i.e., Capital Securities and Grand Fortune go up and down completely randomly.
Pair Corralation between Capital Securities and Grand Fortune
Assuming the 90 days trading horizon Capital Securities Corp is expected to generate 1.28 times more return on investment than Grand Fortune. However, Capital Securities is 1.28 times more volatile than Grand Fortune Securities. It trades about 0.1 of its potential returns per unit of risk. Grand Fortune Securities is currently generating about 0.03 per unit of risk. If you would invest 1,600 in Capital Securities Corp on September 14, 2024 and sell it today you would earn a total of 780.00 from holding Capital Securities Corp or generate 48.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Capital Securities Corp vs. Grand Fortune Securities
Performance |
| Timeline |
| Capital Securities Corp |
| Grand Fortune Securities |
Capital Securities and Grand Fortune Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Capital Securities and Grand Fortune
The main advantage of trading using opposite Capital Securities and Grand Fortune positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Capital Securities position performs unexpectedly, Grand Fortune 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 Grand Fortune will offset losses from the drop in Grand Fortune's long position.| Capital Securities vs. Central Reinsurance Corp | Capital Securities vs. Huaku Development Co | Capital Securities vs. Fubon Financial Holding | Capital Securities vs. Chailease Holding Co |
| Grand Fortune vs. IBF Financial Holdings | Grand Fortune vs. Capital Securities Corp | Grand Fortune vs. President Securities Corp | Grand Fortune vs. China Bills Finance |
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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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