Correlation Between GrandTech and Xander International
Can any of the company-specific risk be diversified away by investing in both GrandTech and Xander International 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 GrandTech and Xander International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GrandTech CG Systems and Xander International, you can compare the effects of market volatilities on GrandTech and Xander International 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 GrandTech with a short position of Xander International. Check out your portfolio center. Please also check ongoing floating volatility patterns of GrandTech and Xander International.
Diversification Opportunities for GrandTech and Xander International
-0.09 | Correlation Coefficient |
Good diversification
The 3 months correlation between GrandTech and Xander is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding GrandTech CG Systems and Xander International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Xander International and GrandTech 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 GrandTech CG Systems are associated (or correlated) with Xander International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Xander International has no effect on the direction of GrandTech i.e., GrandTech and Xander International go up and down completely randomly.
Pair Corralation between GrandTech and Xander International
Assuming the 90 days trading horizon GrandTech CG Systems is expected to generate 0.48 times more return on investment than Xander International. However, GrandTech CG Systems is 2.07 times less risky than Xander International. It trades about 0.02 of its potential returns per unit of risk. Xander International is currently generating about -0.03 per unit of risk. If you would invest 5,117 in GrandTech CG Systems on August 30, 2024 and sell it today you would earn a total of 563.00 from holding GrandTech CG Systems or generate 11.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
GrandTech CG Systems vs. Xander International
Performance |
| Timeline |
| GrandTech CG Systems |
| Xander International |
GrandTech and Xander International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GrandTech and Xander International
The main advantage of trading using opposite GrandTech and Xander International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GrandTech position performs unexpectedly, Xander International 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 Xander International will offset losses from the drop in Xander International's long position.| GrandTech vs. Jia Jie Biomedical | GrandTech vs. BRIM Biotechnology | GrandTech vs. Onyx Healthcare | GrandTech vs. Genovate Biotechnology Co |
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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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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