Correlation Between Grand Fortune and President Securities
Can any of the company-specific risk be diversified away by investing in both Grand Fortune and President Securities 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 Fortune and President Securities into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Grand Fortune Securities and President Securities Corp, you can compare the effects of market volatilities on Grand Fortune and President Securities 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 Fortune with a short position of President Securities. Check out your portfolio center. Please also check ongoing floating volatility patterns of Grand Fortune and President Securities.
Diversification Opportunities for Grand Fortune and President Securities
0.01 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Grand and President is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding Grand Fortune Securities and President Securities Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on President Securities Corp and Grand Fortune 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 Fortune Securities are associated (or correlated) with President Securities. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of President Securities Corp has no effect on the direction of Grand Fortune i.e., Grand Fortune and President Securities go up and down completely randomly.
Pair Corralation between Grand Fortune and President Securities
Assuming the 90 days trading horizon Grand Fortune is expected to generate 3.45 times less return on investment than President Securities. But when comparing it to its historical volatility, Grand Fortune Securities is 1.17 times less risky than President Securities. It trades about 0.03 of its potential returns per unit of risk. President Securities Corp is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 1,920 in President Securities Corp on September 14, 2024 and sell it today you would earn a total of 745.00 from holding President Securities Corp or generate 38.8% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Grand Fortune Securities vs. President Securities Corp
Performance |
| Timeline |
| Grand Fortune Securities |
| President Securities Corp |
Grand Fortune and President Securities Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Grand Fortune and President Securities
The main advantage of trading using opposite Grand Fortune and President Securities positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Grand Fortune position performs unexpectedly, President Securities 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 President Securities will offset losses from the drop in President Securities' long position.| Grand Fortune vs. IBF Financial Holdings | Grand Fortune vs. Capital Securities Corp | Grand Fortune vs. President Securities Corp | Grand Fortune vs. China Bills Finance |
| President Securities vs. Central Reinsurance Corp | President Securities vs. Huaku Development Co | President Securities vs. Fubon Financial Holding | President Securities vs. Chailease Holding Co |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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