Correlation Between GOODTECH ASA and Steadfast Group
Can any of the company-specific risk be diversified away by investing in both GOODTECH ASA and Steadfast Group 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 GOODTECH ASA and Steadfast Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GOODTECH ASA A and Steadfast Group Limited, you can compare the effects of market volatilities on GOODTECH ASA and Steadfast Group 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 GOODTECH ASA with a short position of Steadfast Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of GOODTECH ASA and Steadfast Group.
Diversification Opportunities for GOODTECH ASA and Steadfast Group
-0.42 | Correlation Coefficient |
Very good diversification
The 3 months correlation between GOODTECH and Steadfast is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding GOODTECH ASA A and Steadfast Group Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Steadfast Group and GOODTECH ASA 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 GOODTECH ASA A are associated (or correlated) with Steadfast Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Steadfast Group has no effect on the direction of GOODTECH ASA i.e., GOODTECH ASA and Steadfast Group go up and down completely randomly.
Pair Corralation between GOODTECH ASA and Steadfast Group
Assuming the 90 days horizon GOODTECH ASA A is expected to generate 1.85 times more return on investment than Steadfast Group. However, GOODTECH ASA is 1.85 times more volatile than Steadfast Group Limited. It trades about 0.16 of its potential returns per unit of risk. Steadfast Group Limited is currently generating about -0.13 per unit of risk. If you would invest 83.00 in GOODTECH ASA A on October 12, 2024 and sell it today you would earn a total of 4.00 from holding GOODTECH ASA A or generate 4.82% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
GOODTECH ASA A vs. Steadfast Group Limited
Performance |
| Timeline |
| GOODTECH ASA A |
| Steadfast Group |
GOODTECH ASA and Steadfast Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GOODTECH ASA and Steadfast Group
The main advantage of trading using opposite GOODTECH ASA and Steadfast Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GOODTECH ASA position performs unexpectedly, Steadfast Group 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 Steadfast Group will offset losses from the drop in Steadfast Group's long position.| GOODTECH ASA vs. Vinci S A | GOODTECH ASA vs. Johnson Controls International | GOODTECH ASA vs. Larsen Toubro Limited | GOODTECH ASA vs. China Railway Group |
| Steadfast Group vs. Brown Brown | Steadfast Group vs. Sabre Insurance Group | Steadfast Group vs. Superior Plus Corp | Steadfast Group vs. NMI Holdings |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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