Correlation Between Global Clean and Golden Agri
Can any of the company-specific risk be diversified away by investing in both Global Clean and Golden Agri 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 Global Clean and Golden Agri into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Global Clean Energy and Golden Agri Resources, you can compare the effects of market volatilities on Global Clean and Golden Agri 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 Global Clean with a short position of Golden Agri. Check out your portfolio center. Please also check ongoing floating volatility patterns of Global Clean and Golden Agri.
Diversification Opportunities for Global Clean and Golden Agri
0.22 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Global and Golden is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding Global Clean Energy and Golden Agri Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Golden Agri Resources and Global Clean 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 Global Clean Energy are associated (or correlated) with Golden Agri. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Golden Agri Resources has no effect on the direction of Global Clean i.e., Global Clean and Golden Agri go up and down completely randomly.
Pair Corralation between Global Clean and Golden Agri
If you would invest 64.00 in Global Clean Energy on August 25, 2024 and sell it today you would earn a total of 23.00 from holding Global Clean Energy or generate 35.94% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Global Clean Energy vs. Golden Agri Resources
Performance |
| Timeline |
| Global Clean Energy |
| Golden Agri Resources |
Global Clean and Golden Agri Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Global Clean and Golden Agri
The main advantage of trading using opposite Global Clean and Golden Agri positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Global Clean position performs unexpectedly, Golden Agri 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 Golden Agri will offset losses from the drop in Golden Agri's long position.| Global Clean vs. Embotelladora Andina SA | Global Clean vs. Signet International Holdings | Global Clean vs. National Beverage Corp | Global Clean vs. PT Astra International |
| Golden Agri vs. Avi Ltd ADR | Golden Agri vs. Altavoz Entertainment | Golden Agri vs. The a2 Milk | Golden Agri vs. Aryzta AG PK |
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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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