Correlation Between G Capital and CPR Gomu
Can any of the company-specific risk be diversified away by investing in both G Capital and CPR Gomu 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 G Capital and CPR Gomu into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between G Capital Public and CPR Gomu Industrial, you can compare the effects of market volatilities on G Capital and CPR Gomu 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 G Capital with a short position of CPR Gomu. Check out your portfolio center. Please also check ongoing floating volatility patterns of G Capital and CPR Gomu.
Diversification Opportunities for G Capital and CPR Gomu
Very good diversification
The 3 months correlation between GCAP and CPR is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding G Capital Public and CPR Gomu Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CPR Gomu Industrial and G 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 G Capital Public are associated (or correlated) with CPR Gomu. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CPR Gomu Industrial has no effect on the direction of G Capital i.e., G Capital and CPR Gomu go up and down completely randomly.
Pair Corralation between G Capital and CPR Gomu
Assuming the 90 days trading horizon G Capital Public is expected to generate 29.69 times more return on investment than CPR Gomu. However, G Capital is 29.69 times more volatile than CPR Gomu Industrial. It trades about 0.07 of its potential returns per unit of risk. CPR Gomu Industrial is currently generating about 0.03 per unit of risk. If you would invest 53.00 in G Capital Public on September 3, 2024 and sell it today you would lose (13.00) from holding G Capital Public or give up 24.53% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
G Capital Public vs. CPR Gomu Industrial
Performance |
| Timeline |
| G Capital Public |
| CPR Gomu Industrial |
G Capital and CPR Gomu Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with G Capital and CPR Gomu
The main advantage of trading using opposite G Capital and CPR Gomu positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if G Capital position performs unexpectedly, CPR Gomu 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 CPR Gomu will offset losses from the drop in CPR Gomu's long position.| G Capital vs. Multibax Public | G Capital vs. Forth Smart Service | G Capital vs. LPN Development Public | G Capital vs. Jasmine International Public |
| CPR Gomu vs. Salee Colour Public | CPR Gomu vs. Business Online PCL | CPR Gomu vs. Communication System Solution | CPR Gomu vs. CI Group Public |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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