Correlation Between GOODTECH ASA and Dillards
Can any of the company-specific risk be diversified away by investing in both GOODTECH ASA and Dillards 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 Dillards 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 Dillards, you can compare the effects of market volatilities on GOODTECH ASA and Dillards 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 Dillards. Check out your portfolio center. Please also check ongoing floating volatility patterns of GOODTECH ASA and Dillards.
Diversification Opportunities for GOODTECH ASA and Dillards
-0.71 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between GOODTECH and Dillards is -0.71. Overlapping area represents the amount of risk that can be diversified away by holding GOODTECH ASA A and Dillards in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dillards 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 Dillards. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dillards has no effect on the direction of GOODTECH ASA i.e., GOODTECH ASA and Dillards go up and down completely randomly.
Pair Corralation between GOODTECH ASA and Dillards
Assuming the 90 days horizon GOODTECH ASA is expected to generate 3.7 times less return on investment than Dillards. But when comparing it to its historical volatility, GOODTECH ASA A is 1.07 times less risky than Dillards. It trades about 0.01 of its potential returns per unit of risk. Dillards is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 29,484 in Dillards on August 27, 2024 and sell it today you would earn a total of 12,516 from holding Dillards or generate 42.45% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
GOODTECH ASA A vs. Dillards
Performance |
| Timeline |
| GOODTECH ASA A |
| Dillards |
GOODTECH ASA and Dillards Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GOODTECH ASA and Dillards
The main advantage of trading using opposite GOODTECH ASA and Dillards positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GOODTECH ASA position performs unexpectedly, Dillards 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 Dillards will offset losses from the drop in Dillards' long position.| GOODTECH ASA vs. China Railway Group | GOODTECH ASA vs. China Railway Construction | GOODTECH ASA vs. AECOM | GOODTECH ASA vs. Superior Plus Corp |
| Dillards vs. Aeon Co | Dillards vs. RYOHIN UNSPADR1 | Dillards vs. Superior Plus Corp | Dillards vs. Origin Agritech |
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 CEOs Directory module to screen CEOs from public companies around the world.
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