Correlation Between Trade Van and Gigasolar Materials
Can any of the company-specific risk be diversified away by investing in both Trade Van and Gigasolar Materials 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 Trade Van and Gigasolar Materials into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Trade Van Information Services and Gigasolar Materials, you can compare the effects of market volatilities on Trade Van and Gigasolar Materials 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 Trade Van with a short position of Gigasolar Materials. Check out your portfolio center. Please also check ongoing floating volatility patterns of Trade Van and Gigasolar Materials.
Diversification Opportunities for Trade Van and Gigasolar Materials
-0.73 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Trade and Gigasolar is -0.73. Overlapping area represents the amount of risk that can be diversified away by holding Trade Van Information Services and Gigasolar Materials in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gigasolar Materials and Trade Van 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 Trade Van Information Services are associated (or correlated) with Gigasolar Materials. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gigasolar Materials has no effect on the direction of Trade Van i.e., Trade Van and Gigasolar Materials go up and down completely randomly.
Pair Corralation between Trade Van and Gigasolar Materials
Assuming the 90 days trading horizon Trade Van Information Services is expected to generate 0.53 times more return on investment than Gigasolar Materials. However, Trade Van Information Services is 1.89 times less risky than Gigasolar Materials. It trades about 0.14 of its potential returns per unit of risk. Gigasolar Materials is currently generating about -0.19 per unit of risk. If you would invest 7,910 in Trade Van Information Services on August 26, 2024 and sell it today you would earn a total of 290.00 from holding Trade Van Information Services or generate 3.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Trade Van Information Services vs. Gigasolar Materials
Performance |
| Timeline |
| Trade Van Information |
| Gigasolar Materials |
Trade Van and Gigasolar Materials Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Trade Van and Gigasolar Materials
The main advantage of trading using opposite Trade Van and Gigasolar Materials positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Trade Van position performs unexpectedly, Gigasolar Materials 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 Gigasolar Materials will offset losses from the drop in Gigasolar Materials' long position.| Trade Van vs. Taiwan Sakura Corp | Trade Van vs. Charoen Pokphand Enterprise | Trade Van vs. Taiwan Cogeneration Corp | Trade Van vs. Taiwan Secom Co |
| Gigasolar Materials vs. Trade Van Information Services | Gigasolar Materials vs. Insyde Software | Gigasolar Materials vs. C Media Electronics | Gigasolar Materials vs. Formosa Chemicals Fibre |
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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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