Correlation Between GDS Holdings and Acme United
Can any of the company-specific risk be diversified away by investing in both GDS Holdings and Acme United 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 GDS Holdings and Acme United into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GDS Holdings and Acme United, you can compare the effects of market volatilities on GDS Holdings and Acme United 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 GDS Holdings with a short position of Acme United. Check out your portfolio center. Please also check ongoing floating volatility patterns of GDS Holdings and Acme United.
Diversification Opportunities for GDS Holdings and Acme United
-0.45 | Correlation Coefficient |
Very good diversification
The 3 months correlation between GDS and Acme is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding GDS Holdings and Acme United in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Acme United and GDS Holdings 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 GDS Holdings are associated (or correlated) with Acme United. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Acme United has no effect on the direction of GDS Holdings i.e., GDS Holdings and Acme United go up and down completely randomly.
Pair Corralation between GDS Holdings and Acme United
Considering the 90-day investment horizon GDS Holdings is expected to generate 2.68 times less return on investment than Acme United. In addition to that, GDS Holdings is 1.51 times more volatile than Acme United. It trades about 0.01 of its total potential returns per unit of risk. Acme United is currently generating about 0.06 per unit of volatility. If you would invest 2,433 in Acme United on August 27, 2024 and sell it today you would earn a total of 1,863 from holding Acme United or generate 76.57% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
GDS Holdings vs. Acme United
Performance |
| Timeline |
| GDS Holdings |
| Acme United |
GDS Holdings and Acme United Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GDS Holdings and Acme United
The main advantage of trading using opposite GDS Holdings and Acme United positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GDS Holdings position performs unexpectedly, Acme United 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 Acme United will offset losses from the drop in Acme United's long position.| GDS Holdings vs. Oneconnect Financial Technology | GDS Holdings vs. Global Business Travel | GDS Holdings vs. Alight Inc | GDS Holdings vs. CS Disco LLC |
| Acme United vs. Mannatech Incorporated | Acme United vs. Inter Parfums | Acme United vs. Nu Skin Enterprises | Acme United vs. Procter Gamble |
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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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