Correlation Between Encore Capital and Goldenstone Acquisition
Can any of the company-specific risk be diversified away by investing in both Encore Capital and Goldenstone Acquisition 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 Encore Capital and Goldenstone Acquisition into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Encore Capital Group and Goldenstone Acquisition, you can compare the effects of market volatilities on Encore Capital and Goldenstone Acquisition 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 Encore Capital with a short position of Goldenstone Acquisition. Check out your portfolio center. Please also check ongoing floating volatility patterns of Encore Capital and Goldenstone Acquisition.
Diversification Opportunities for Encore Capital and Goldenstone Acquisition
-0.54 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Encore and Goldenstone is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding Encore Capital Group and Goldenstone Acquisition in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Goldenstone Acquisition and Encore Capital 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 Encore Capital Group are associated (or correlated) with Goldenstone Acquisition. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Goldenstone Acquisition has no effect on the direction of Encore Capital i.e., Encore Capital and Goldenstone Acquisition go up and down completely randomly.
Pair Corralation between Encore Capital and Goldenstone Acquisition
Given the investment horizon of 90 days Encore Capital is expected to generate 1.25 times less return on investment than Goldenstone Acquisition. In addition to that, Encore Capital is 11.15 times more volatile than Goldenstone Acquisition. It trades about 0.01 of its total potential returns per unit of risk. Goldenstone Acquisition is currently generating about 0.07 per unit of volatility. If you would invest 1,067 in Goldenstone Acquisition on August 26, 2024 and sell it today you would earn a total of 53.00 from holding Goldenstone Acquisition or generate 4.97% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Encore Capital Group vs. Goldenstone Acquisition
Performance |
| Timeline |
| Encore Capital Group |
| Goldenstone Acquisition |
Encore Capital and Goldenstone Acquisition Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Encore Capital and Goldenstone Acquisition
The main advantage of trading using opposite Encore Capital and Goldenstone Acquisition positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Encore Capital position performs unexpectedly, Goldenstone Acquisition 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 Goldenstone Acquisition will offset losses from the drop in Goldenstone Acquisition's long position.| Encore Capital vs. Guild Holdings Co | Encore Capital vs. Mr Cooper Group | Encore Capital vs. CNFinance Holdings | Encore Capital vs. Security National Financial |
| Goldenstone Acquisition vs. PowerUp Acquisition Corp | Goldenstone Acquisition vs. Aurora Innovation | Goldenstone Acquisition vs. HUMANA INC | Goldenstone Acquisition vs. Aquagold International |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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