Correlation Between Good Finance and Capital Futures
Can any of the company-specific risk be diversified away by investing in both Good Finance and Capital Futures 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 Good Finance and Capital Futures into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Good Finance Securities and Capital Futures Corp, you can compare the effects of market volatilities on Good Finance and Capital Futures 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 Good Finance with a short position of Capital Futures. Check out your portfolio center. Please also check ongoing floating volatility patterns of Good Finance and Capital Futures.
Diversification Opportunities for Good Finance and Capital Futures
0.03 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Good and Capital is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding Good Finance Securities and Capital Futures Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Capital Futures Corp and Good Finance 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 Good Finance Securities are associated (or correlated) with Capital Futures. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Capital Futures Corp has no effect on the direction of Good Finance i.e., Good Finance and Capital Futures go up and down completely randomly.
Pair Corralation between Good Finance and Capital Futures
Assuming the 90 days trading horizon Good Finance Securities is expected to generate 1.88 times more return on investment than Capital Futures. However, Good Finance is 1.88 times more volatile than Capital Futures Corp. It trades about 0.09 of its potential returns per unit of risk. Capital Futures Corp is currently generating about 0.06 per unit of risk. If you would invest 1,480 in Good Finance Securities on September 14, 2024 and sell it today you would earn a total of 920.00 from holding Good Finance Securities or generate 62.16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Good Finance Securities vs. Capital Futures Corp
Performance |
| Timeline |
| Good Finance Securities |
| Capital Futures Corp |
Good Finance and Capital Futures Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Good Finance and Capital Futures
The main advantage of trading using opposite Good Finance and Capital Futures positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Good Finance position performs unexpectedly, Capital Futures 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 Capital Futures will offset losses from the drop in Capital Futures' long position.| Good Finance vs. IBF Financial Holdings | Good Finance vs. Capital Securities Corp | Good Finance vs. President Securities Corp | Good Finance vs. China Bills Finance |
| Capital Futures vs. IBF Financial Holdings | Capital Futures vs. Capital Securities Corp | Capital Futures vs. President Securities Corp | Capital Futures 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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