Correlation Between Goodfellow and Inventronics
Can any of the company-specific risk be diversified away by investing in both Goodfellow and Inventronics 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 Goodfellow and Inventronics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Goodfellow and Inventronics, you can compare the effects of market volatilities on Goodfellow and Inventronics 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 Goodfellow with a short position of Inventronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Goodfellow and Inventronics.
Diversification Opportunities for Goodfellow and Inventronics
0.58 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Goodfellow and Inventronics is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding Goodfellow and Inventronics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Inventronics and Goodfellow 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 Goodfellow are associated (or correlated) with Inventronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Inventronics has no effect on the direction of Goodfellow i.e., Goodfellow and Inventronics go up and down completely randomly.
Pair Corralation between Goodfellow and Inventronics
Assuming the 90 days trading horizon Goodfellow is expected to generate 0.36 times more return on investment than Inventronics. However, Goodfellow is 2.81 times less risky than Inventronics. It trades about 0.03 of its potential returns per unit of risk. Inventronics is currently generating about -0.02 per unit of risk. If you would invest 1,095 in Goodfellow on September 3, 2024 and sell it today you would earn a total of 294.00 from holding Goodfellow or generate 26.85% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Goodfellow vs. Inventronics
Performance |
| Timeline |
| Goodfellow |
| Inventronics |
Goodfellow and Inventronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Goodfellow and Inventronics
The main advantage of trading using opposite Goodfellow and Inventronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Goodfellow position performs unexpectedly, Inventronics 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 Inventronics will offset losses from the drop in Inventronics' long position.| Goodfellow vs. Algoma Central | Goodfellow vs. Taiga Building Products | Goodfellow vs. Conifex Timber | Goodfellow vs. Acadian Timber Corp |
| Inventronics vs. Alaris Equity Partners | Inventronics vs. Timbercreek Financial Corp | Inventronics vs. Fiera Capital | Inventronics vs. Diversified Royalty Corp |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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