Correlation Between GFPT Public and Fine Metal
Can any of the company-specific risk be diversified away by investing in both GFPT Public and Fine Metal 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 GFPT Public and Fine Metal into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GFPT Public and Fine Metal Technologies, you can compare the effects of market volatilities on GFPT Public and Fine Metal 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 GFPT Public with a short position of Fine Metal. Check out your portfolio center. Please also check ongoing floating volatility patterns of GFPT Public and Fine Metal.
Diversification Opportunities for GFPT Public and Fine Metal
-0.11 | Correlation Coefficient |
Good diversification
The 3 months correlation between GFPT and Fine is -0.11. Overlapping area represents the amount of risk that can be diversified away by holding GFPT Public and Fine Metal Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fine Metal Technologies and GFPT Public 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 GFPT Public are associated (or correlated) with Fine Metal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fine Metal Technologies has no effect on the direction of GFPT Public i.e., GFPT Public and Fine Metal go up and down completely randomly.
Pair Corralation between GFPT Public and Fine Metal
Assuming the 90 days trading horizon GFPT Public is expected to generate 119.73 times less return on investment than Fine Metal. But when comparing it to its historical volatility, GFPT Public is 37.87 times less risky than Fine Metal. It trades about 0.02 of its potential returns per unit of risk. Fine Metal Technologies is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 3,148 in Fine Metal Technologies on August 29, 2024 and sell it today you would earn a total of 202.00 from holding Fine Metal Technologies or generate 6.42% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.58% |
| Values | Daily Returns |
GFPT Public vs. Fine Metal Technologies
Performance |
| Timeline |
| GFPT Public |
| Fine Metal Technologies |
GFPT Public and Fine Metal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GFPT Public and Fine Metal
The main advantage of trading using opposite GFPT Public and Fine Metal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GFPT Public position performs unexpectedly, Fine Metal 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 Fine Metal will offset losses from the drop in Fine Metal's long position.| GFPT Public vs. Charoen Pokphand Foods | GFPT Public vs. Hana Microelectronics Public | GFPT Public vs. AP Public | GFPT Public vs. Thai Vegetable Oil |
| Fine Metal vs. GFPT Public | Fine Metal vs. Kulthorn Kirby Public | Fine Metal vs. Chumporn Palm Oil | Fine Metal vs. Haad Thip Public |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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