Correlation Between GREENLIGHT CAP and COFCO Joycome
Can any of the company-specific risk be diversified away by investing in both GREENLIGHT CAP and COFCO Joycome 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 GREENLIGHT CAP and COFCO Joycome into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GREENLIGHT CAP RE and COFCO Joycome Foods, you can compare the effects of market volatilities on GREENLIGHT CAP and COFCO Joycome 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 GREENLIGHT CAP with a short position of COFCO Joycome. Check out your portfolio center. Please also check ongoing floating volatility patterns of GREENLIGHT CAP and COFCO Joycome.
Diversification Opportunities for GREENLIGHT CAP and COFCO Joycome
-0.3 | Correlation Coefficient |
Very good diversification
The 3 months correlation between GREENLIGHT and COFCO is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding GREENLIGHT CAP RE and COFCO Joycome Foods in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on COFCO Joycome Foods and GREENLIGHT CAP 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 GREENLIGHT CAP RE are associated (or correlated) with COFCO Joycome. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of COFCO Joycome Foods has no effect on the direction of GREENLIGHT CAP i.e., GREENLIGHT CAP and COFCO Joycome go up and down completely randomly.
Pair Corralation between GREENLIGHT CAP and COFCO Joycome
Assuming the 90 days trading horizon GREENLIGHT CAP RE is expected to generate 0.47 times more return on investment than COFCO Joycome. However, GREENLIGHT CAP RE is 2.13 times less risky than COFCO Joycome. It trades about -0.14 of its potential returns per unit of risk. COFCO Joycome Foods is currently generating about -0.23 per unit of risk. If you would invest 1,400 in GREENLIGHT CAP RE on October 12, 2024 and sell it today you would lose (50.00) from holding GREENLIGHT CAP RE or give up 3.57% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 94.44% |
| Values | Daily Returns |
GREENLIGHT CAP RE vs. COFCO Joycome Foods
Performance |
| Timeline |
| GREENLIGHT CAP RE |
| COFCO Joycome Foods |
GREENLIGHT CAP and COFCO Joycome Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GREENLIGHT CAP and COFCO Joycome
The main advantage of trading using opposite GREENLIGHT CAP and COFCO Joycome positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GREENLIGHT CAP position performs unexpectedly, COFCO Joycome 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 COFCO Joycome will offset losses from the drop in COFCO Joycome's long position.| GREENLIGHT CAP vs. TITANIUM TRANSPORTGROUP | GREENLIGHT CAP vs. Liberty Broadband | GREENLIGHT CAP vs. UNITED RENTALS | GREENLIGHT CAP vs. Texas Roadhouse |
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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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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