Correlation Between Goodfood Market and PJX Resources
Can any of the company-specific risk be diversified away by investing in both Goodfood Market and PJX 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 Goodfood Market and PJX Resources into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Goodfood Market Corp and PJX Resources, you can compare the effects of market volatilities on Goodfood Market and PJX 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 Goodfood Market with a short position of PJX Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Goodfood Market and PJX Resources.
Diversification Opportunities for Goodfood Market and PJX Resources
-0.8 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Goodfood and PJX is -0.8. Overlapping area represents the amount of risk that can be diversified away by holding Goodfood Market Corp and PJX Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PJX Resources and Goodfood Market 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 Goodfood Market Corp are associated (or correlated) with PJX Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PJX Resources has no effect on the direction of Goodfood Market i.e., Goodfood Market and PJX Resources go up and down completely randomly.
Pair Corralation between Goodfood Market and PJX Resources
Assuming the 90 days trading horizon Goodfood Market Corp is expected to generate 0.78 times more return on investment than PJX Resources. However, Goodfood Market Corp is 1.28 times less risky than PJX Resources. It trades about 0.34 of its potential returns per unit of risk. PJX Resources is currently generating about -0.09 per unit of risk. If you would invest 29.00 in Goodfood Market Corp on August 29, 2024 and sell it today you would earn a total of 16.00 from holding Goodfood Market Corp or generate 55.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Goodfood Market Corp vs. PJX Resources
Performance |
| Timeline |
| Goodfood Market Corp |
| PJX Resources |
Goodfood Market and PJX Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Goodfood Market and PJX Resources
The main advantage of trading using opposite Goodfood Market and PJX Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Goodfood Market position performs unexpectedly, PJX 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 PJX Resources will offset losses from the drop in PJX Resources' long position.| Goodfood Market vs. Eros Resources Corp | Goodfood Market vs. Apple Inc CDR | Goodfood Market vs. European Residential Real | Goodfood Market vs. Amazon CDR |
| PJX Resources vs. First Majestic Silver | PJX Resources vs. Ivanhoe Energy | PJX Resources vs. Orezone Gold Corp | PJX Resources vs. Faraday Copper 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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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