Correlation Between Green World and Grand Plastic
Can any of the company-specific risk be diversified away by investing in both Green World and Grand Plastic 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 Green World and Grand Plastic into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Green World Fintech and Grand Plastic Technology, you can compare the effects of market volatilities on Green World and Grand Plastic 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 Green World with a short position of Grand Plastic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Green World and Grand Plastic.
Diversification Opportunities for Green World and Grand Plastic
-0.6 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Green and Grand is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding Green World Fintech and Grand Plastic Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Grand Plastic Technology and Green World 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 Green World Fintech are associated (or correlated) with Grand Plastic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Grand Plastic Technology has no effect on the direction of Green World i.e., Green World and Grand Plastic go up and down completely randomly.
Pair Corralation between Green World and Grand Plastic
Assuming the 90 days trading horizon Green World Fintech is expected to under-perform the Grand Plastic. In addition to that, Green World is 1.34 times more volatile than Grand Plastic Technology. It trades about -0.22 of its total potential returns per unit of risk. Grand Plastic Technology is currently generating about -0.01 per unit of volatility. If you would invest 169,500 in Grand Plastic Technology on September 4, 2024 and sell it today you would lose (2,500) from holding Grand Plastic Technology or give up 1.47% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Green World Fintech vs. Grand Plastic Technology
Performance |
| Timeline |
| Green World Fintech |
| Grand Plastic Technology |
Green World and Grand Plastic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Green World and Grand Plastic
The main advantage of trading using opposite Green World and Grand Plastic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Green World position performs unexpectedly, Grand Plastic 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 Grand Plastic will offset losses from the drop in Grand Plastic's long position.| Green World vs. Chinese Maritime Transport | Green World vs. First Insurance Co | Green World vs. Niko Semiconductor Co | Green World vs. Chung Hsin Electric Machinery |
| Grand Plastic vs. CHC Healthcare Group | Grand Plastic vs. GameSparcs Co | Grand Plastic vs. SS Healthcare Holding | Grand Plastic vs. Chinese Gamer International |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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