Correlation Between Chesswood Group and Goeasy
Can any of the company-specific risk be diversified away by investing in both Chesswood Group and Goeasy 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 Chesswood Group and Goeasy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Chesswood Group Limited and goeasy, you can compare the effects of market volatilities on Chesswood Group and Goeasy 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 Chesswood Group with a short position of Goeasy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chesswood Group and Goeasy.
Diversification Opportunities for Chesswood Group and Goeasy
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Chesswood and Goeasy is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Chesswood Group Limited and goeasy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on goeasy and Chesswood Group 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 Chesswood Group Limited are associated (or correlated) with Goeasy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of goeasy has no effect on the direction of Chesswood Group i.e., Chesswood Group and Goeasy go up and down completely randomly.
Pair Corralation between Chesswood Group and Goeasy
Assuming the 90 days trading horizon Chesswood Group Limited is expected to under-perform the Goeasy. In addition to that, Chesswood Group is 1.91 times more volatile than goeasy. It trades about -0.1 of its total potential returns per unit of risk. goeasy is currently generating about 0.06 per unit of volatility. If you would invest 10,371 in goeasy on September 27, 2024 and sell it today you would earn a total of 6,206 from holding goeasy or generate 59.84% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 98.99% |
| Values | Daily Returns |
Chesswood Group Limited vs. goeasy
Performance |
| Timeline |
| Chesswood Group |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| goeasy |
Chesswood Group and Goeasy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chesswood Group and Goeasy
The main advantage of trading using opposite Chesswood Group and Goeasy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chesswood Group position performs unexpectedly, Goeasy 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 Goeasy will offset losses from the drop in Goeasy's long position.| Chesswood Group vs. Algoma Central | Chesswood Group vs. Clairvest Group | Chesswood Group vs. Clarke Inc | Chesswood Group vs. ADF Group |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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