Correlation Between Garda Diversified and Strickland Metals
Can any of the company-specific risk be diversified away by investing in both Garda Diversified and Strickland Metals 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 Garda Diversified and Strickland Metals into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Garda Diversified Ppty and Strickland Metals, you can compare the effects of market volatilities on Garda Diversified and Strickland Metals 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 Garda Diversified with a short position of Strickland Metals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Garda Diversified and Strickland Metals.
Diversification Opportunities for Garda Diversified and Strickland Metals
-0.44 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Garda and Strickland is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding Garda Diversified Ppty and Strickland Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Strickland Metals and Garda Diversified 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 Garda Diversified Ppty are associated (or correlated) with Strickland Metals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Strickland Metals has no effect on the direction of Garda Diversified i.e., Garda Diversified and Strickland Metals go up and down completely randomly.
Pair Corralation between Garda Diversified and Strickland Metals
Assuming the 90 days trading horizon Garda Diversified is expected to generate 12.54 times less return on investment than Strickland Metals. But when comparing it to its historical volatility, Garda Diversified Ppty is 4.9 times less risky than Strickland Metals. It trades about 0.09 of its potential returns per unit of risk. Strickland Metals is currently generating about 0.22 of returns per unit of risk over similar time horizon. If you would invest 7.80 in Strickland Metals on September 15, 2024 and sell it today you would earn a total of 1.70 from holding Strickland Metals or generate 21.79% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Garda Diversified Ppty vs. Strickland Metals
Performance |
| Timeline |
| Garda Diversified Ppty |
| Strickland Metals |
Garda Diversified and Strickland Metals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Garda Diversified and Strickland Metals
The main advantage of trading using opposite Garda Diversified and Strickland Metals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Garda Diversified position performs unexpectedly, Strickland Metals 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 Strickland Metals will offset losses from the drop in Strickland Metals' long position.| Garda Diversified vs. Scentre Group | Garda Diversified vs. Vicinity Centres Re | Garda Diversified vs. Charter Hall Retail | Garda Diversified vs. Cromwell Property Group |
| Strickland Metals vs. Garda Diversified Ppty | Strickland Metals vs. Mirrabooka Investments | Strickland Metals vs. Falcon Metals | Strickland Metals vs. Farm Pride Foods |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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