Correlation Between Gold Ent and IFAN Financial
Can any of the company-specific risk be diversified away by investing in both Gold Ent and IFAN Financial 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 IFAN Financial 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 IFAN Financial, you can compare the effects of market volatilities on Gold Ent and IFAN Financial 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 IFAN Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gold Ent and IFAN Financial.
Diversification Opportunities for Gold Ent and IFAN Financial
-0.13 | Correlation Coefficient |
Good diversification
The 3 months correlation between Gold and IFAN is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding Gold Ent Group and IFAN Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on IFAN Financial 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 IFAN Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of IFAN Financial has no effect on the direction of Gold Ent i.e., Gold Ent and IFAN Financial go up and down completely randomly.
Pair Corralation between Gold Ent and IFAN Financial
Given the investment horizon of 90 days Gold Ent is expected to generate 2.55 times less return on investment than IFAN Financial. But when comparing it to its historical volatility, Gold Ent Group is 1.16 times less risky than IFAN Financial. It trades about 0.06 of its potential returns per unit of risk. IFAN Financial is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest 0.03 in IFAN Financial on August 29, 2024 and sell it today you would lose (0.01) from holding IFAN Financial or give up 33.33% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Gold Ent Group vs. IFAN Financial
Performance |
| Timeline |
| Gold Ent Group |
| IFAN Financial |
Gold Ent and IFAN Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gold Ent and IFAN Financial
The main advantage of trading using opposite Gold Ent and IFAN Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gold Ent position performs unexpectedly, IFAN Financial 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 IFAN Financial will offset losses from the drop in IFAN Financial's long position.| Gold Ent vs. Atlas Technology Grp | Gold Ent vs. Absolute Health and | Gold Ent vs. Alpha Wastewater | Gold Ent vs. Supurva Healthcare Group |
| IFAN Financial vs. First Colombia Gold | IFAN Financial vs. Eline Entertainment Group | IFAN Financial vs. All American Gld | IFAN Financial vs. Green Leaf Innovations |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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