Correlation Between BROADWIND ENRGY and GAMING FAC
Can any of the company-specific risk be diversified away by investing in both BROADWIND ENRGY and GAMING FAC 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 BROADWIND ENRGY and GAMING FAC into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BROADWIND ENRGY and GAMING FAC SA, you can compare the effects of market volatilities on BROADWIND ENRGY and GAMING FAC 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 BROADWIND ENRGY with a short position of GAMING FAC. Check out your portfolio center. Please also check ongoing floating volatility patterns of BROADWIND ENRGY and GAMING FAC.
Diversification Opportunities for BROADWIND ENRGY and GAMING FAC
0.52 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between BROADWIND and GAMING is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding BROADWIND ENRGY and GAMING FAC SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GAMING FAC SA and BROADWIND ENRGY 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 BROADWIND ENRGY are associated (or correlated) with GAMING FAC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GAMING FAC SA has no effect on the direction of BROADWIND ENRGY i.e., BROADWIND ENRGY and GAMING FAC go up and down completely randomly.
Pair Corralation between BROADWIND ENRGY and GAMING FAC
Assuming the 90 days trading horizon BROADWIND ENRGY is expected to generate 1.8 times more return on investment than GAMING FAC. However, BROADWIND ENRGY is 1.8 times more volatile than GAMING FAC SA. It trades about 0.16 of its potential returns per unit of risk. GAMING FAC SA is currently generating about 0.01 per unit of risk. If you would invest 147.00 in BROADWIND ENRGY on September 22, 2024 and sell it today you would earn a total of 21.00 from holding BROADWIND ENRGY or generate 14.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
BROADWIND ENRGY vs. GAMING FAC SA
Performance |
| Timeline |
| BROADWIND ENRGY |
| GAMING FAC SA |
BROADWIND ENRGY and GAMING FAC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BROADWIND ENRGY and GAMING FAC
The main advantage of trading using opposite BROADWIND ENRGY and GAMING FAC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BROADWIND ENRGY position performs unexpectedly, GAMING FAC 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 GAMING FAC will offset losses from the drop in GAMING FAC's long position.| BROADWIND ENRGY vs. Apple Inc | BROADWIND ENRGY vs. Apple Inc | BROADWIND ENRGY vs. Apple Inc | BROADWIND ENRGY vs. Apple Inc |
| GAMING FAC vs. Kaufman Broad SA | GAMING FAC vs. Sanyo Chemical Industries | GAMING FAC vs. BROADWIND ENRGY | GAMING FAC vs. Soken Chemical Engineering |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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