Correlation Between Grand Fortune and IBF Financial
Can any of the company-specific risk be diversified away by investing in both Grand Fortune and IBF Financial 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 IBF Financial 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 IBF Financial Holdings, you can compare the effects of market volatilities on Grand Fortune and IBF Financial 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 IBF Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Grand Fortune and IBF Financial.
Diversification Opportunities for Grand Fortune and IBF Financial
0.37 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Grand and IBF is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding Grand Fortune Securities and IBF Financial Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on IBF Financial Holdings 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 IBF Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of IBF Financial Holdings has no effect on the direction of Grand Fortune i.e., Grand Fortune and IBF Financial go up and down completely randomly.
Pair Corralation between Grand Fortune and IBF Financial
Assuming the 90 days trading horizon Grand Fortune is expected to generate 2.7 times less return on investment than IBF Financial. In addition to that, Grand Fortune is 1.05 times more volatile than IBF Financial Holdings. It trades about 0.03 of its total potential returns per unit of risk. IBF Financial Holdings is currently generating about 0.09 per unit of volatility. If you would invest 1,155 in IBF Financial Holdings on September 14, 2024 and sell it today you would earn a total of 345.00 from holding IBF Financial Holdings or generate 29.87% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Grand Fortune Securities vs. IBF Financial Holdings
Performance |
| Timeline |
| Grand Fortune Securities |
| IBF Financial Holdings |
Grand Fortune and IBF Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Grand Fortune and IBF Financial
The main advantage of trading using opposite Grand Fortune and IBF Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Grand Fortune position performs unexpectedly, IBF Financial 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 IBF Financial will offset losses from the drop in IBF Financial's 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 |
| IBF Financial vs. Central Reinsurance Corp | IBF Financial vs. Huaku Development Co | IBF Financial vs. Fubon Financial Holding | IBF Financial 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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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