Correlation Between Gold Ent and American Leisure
Can any of the company-specific risk be diversified away by investing in both Gold Ent and American Leisure 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 Gold Ent and American Leisure into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Gold Ent Group and American Leisure Holdings, you can compare the effects of market volatilities on Gold Ent and American Leisure 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 Gold Ent with a short position of American Leisure. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gold Ent and American Leisure.
Diversification Opportunities for Gold Ent and American Leisure
-0.16 | Correlation Coefficient |
Good diversification
The 3 months correlation between Gold and American is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding Gold Ent Group and American Leisure Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American Leisure Holdings and Gold Ent 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 Gold Ent Group are associated (or correlated) with American Leisure. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of American Leisure Holdings has no effect on the direction of Gold Ent i.e., Gold Ent and American Leisure go up and down completely randomly.
Pair Corralation between Gold Ent and American Leisure
Given the investment horizon of 90 days Gold Ent is expected to generate 1.42 times less return on investment than American Leisure. But when comparing it to its historical volatility, Gold Ent Group is 1.17 times less risky than American Leisure. It trades about 0.13 of its potential returns per unit of risk. American Leisure Holdings is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest 0.02 in American Leisure Holdings on August 26, 2024 and sell it today you would earn a total of 0.00 from holding American Leisure Holdings or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Gold Ent Group vs. American Leisure Holdings
Performance |
| Timeline |
| Gold Ent Group |
| American Leisure Holdings |
Gold Ent and American Leisure Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gold Ent and American Leisure
The main advantage of trading using opposite Gold Ent and American Leisure positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gold Ent position performs unexpectedly, American Leisure 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 American Leisure will offset losses from the drop in American Leisure's long position.| Gold Ent vs. Absolute Health and | Gold Ent vs. China Health Management | Gold Ent vs. Embrace Change Acquisition | Gold Ent vs. TransAKT |
| American Leisure vs. Absolute Health and | American Leisure vs. China Health Management | American Leisure vs. Embrace Change Acquisition | American Leisure vs. TransAKT |
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 Stocks Directory module to find actively traded stocks across global markets.
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