Correlation Between Cardano and Gulf Resources
Can any of the company-specific risk be diversified away by investing in both Cardano and Gulf Resources 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 Cardano and Gulf Resources into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cardano and Gulf Resources, you can compare the effects of market volatilities on Cardano and Gulf Resources 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 Cardano with a short position of Gulf Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cardano and Gulf Resources.
Diversification Opportunities for Cardano and Gulf Resources
-0.57 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Cardano and Gulf is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding Cardano and Gulf Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gulf Resources and Cardano 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 Cardano are associated (or correlated) with Gulf Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gulf Resources has no effect on the direction of Cardano i.e., Cardano and Gulf Resources go up and down completely randomly.
Pair Corralation between Cardano and Gulf Resources
Assuming the 90 days trading horizon Cardano is expected to generate 0.65 times more return on investment than Gulf Resources. However, Cardano is 1.55 times less risky than Gulf Resources. It trades about 0.17 of its potential returns per unit of risk. Gulf Resources is currently generating about 0.09 per unit of risk. If you would invest 95.00 in Cardano on October 20, 2024 and sell it today you would earn a total of 19.00 from holding Cardano or generate 20.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.24% |
| Values | Daily Returns |
Cardano vs. Gulf Resources
Performance |
| Timeline |
| Cardano |
| Gulf Resources |
Cardano and Gulf Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cardano and Gulf Resources
The main advantage of trading using opposite Cardano and Gulf Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cardano position performs unexpectedly, Gulf Resources 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 Gulf Resources will offset losses from the drop in Gulf Resources' long position.The idea behind Cardano and Gulf Resources pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Gulf Resources vs. Energy and Environmental | Gulf Resources vs. Alumifuel Pwr Corp | Gulf Resources vs. First Graphene | Gulf Resources vs. ASP Isotopes Common |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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