Correlation Between Target and Galexxy Holdings
Can any of the company-specific risk be diversified away by investing in both Target and Galexxy Holdings 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 Target and Galexxy Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Target Group and Galexxy Holdings, you can compare the effects of market volatilities on Target and Galexxy Holdings 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 Target with a short position of Galexxy Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Target and Galexxy Holdings.
Diversification Opportunities for Target and Galexxy Holdings
0.27 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Target and Galexxy is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding Target Group and Galexxy Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Galexxy Holdings and Target 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 Target Group are associated (or correlated) with Galexxy Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Galexxy Holdings has no effect on the direction of Target i.e., Target and Galexxy Holdings go up and down completely randomly.
Pair Corralation between Target and Galexxy Holdings
Given the investment horizon of 90 days Target Group is expected to generate 2.03 times more return on investment than Galexxy Holdings. However, Target is 2.03 times more volatile than Galexxy Holdings. It trades about 0.09 of its potential returns per unit of risk. Galexxy Holdings is currently generating about 0.02 per unit of risk. If you would invest 0.75 in Target Group on August 26, 2024 and sell it today you would lose (0.51) from holding Target Group or give up 68.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 97.59% |
| Values | Daily Returns |
Target Group vs. Galexxy Holdings
Performance |
| Timeline |
| Target Group |
| Galexxy Holdings |
Target and Galexxy Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Target and Galexxy Holdings
The main advantage of trading using opposite Target and Galexxy Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Target position performs unexpectedly, Galexxy Holdings 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 Galexxy Holdings will offset losses from the drop in Galexxy Holdings' long position.| Target vs. Green Cures Botanical | Target vs. Galexxy Holdings | Target vs. Indoor Harvest Corp | Target vs. Speakeasy Cannabis Club |
| Galexxy Holdings vs. Genesis Electronics Group | Galexxy Holdings vs. Nextmart | Galexxy Holdings vs. Emergent Health Corp | Galexxy Holdings vs. Goff Corp |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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