Correlation Between G Capital and East Coast
Can any of the company-specific risk be diversified away by investing in both G Capital and East Coast 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 East Coast 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 East Coast Furnitech, you can compare the effects of market volatilities on G Capital and East Coast 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 East Coast. Check out your portfolio center. Please also check ongoing floating volatility patterns of G Capital and East Coast.
Diversification Opportunities for G Capital and East Coast
0.55 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between GCAP and East is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding G Capital Public and East Coast Furnitech in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on East Coast Furnitech 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 East Coast. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of East Coast Furnitech has no effect on the direction of G Capital i.e., G Capital and East Coast go up and down completely randomly.
Pair Corralation between G Capital and East Coast
Assuming the 90 days trading horizon G Capital Public is expected to generate 0.86 times more return on investment than East Coast. However, G Capital Public is 1.16 times less risky than East Coast. It trades about 0.02 of its potential returns per unit of risk. East Coast Furnitech is currently generating about -0.42 per unit of risk. If you would invest 32.00 in G Capital Public on November 3, 2024 and sell it today you would earn a total of 0.00 from holding G Capital Public or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
G Capital Public vs. East Coast Furnitech
Performance |
| Timeline |
| G Capital Public |
| East Coast Furnitech |
G Capital and East Coast Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with G Capital and East Coast
The main advantage of trading using opposite G Capital and East Coast positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if G Capital position performs unexpectedly, East Coast 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 East Coast will offset losses from the drop in East Coast's long position.| G Capital vs. East Coast Furnitech | G Capital vs. Filter Vision Public | G Capital vs. Cho Thavee Public | G Capital vs. Akkhie Prakarn Public |
| East Coast vs. G Capital Public | East Coast vs. E for L | East Coast vs. Filter Vision Public | East Coast vs. Chewathai 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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