Correlation Between Global Green and SC Asset
Can any of the company-specific risk be diversified away by investing in both Global Green and SC Asset 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 Global Green and SC Asset into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Global Green Chemicals and SC Asset, you can compare the effects of market volatilities on Global Green and SC Asset 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 Global Green with a short position of SC Asset. Check out your portfolio center. Please also check ongoing floating volatility patterns of Global Green and SC Asset.
Diversification Opportunities for Global Green and SC Asset
0.17 | Correlation Coefficient |
Average diversification
The 3 months correlation between Global and SC Asset is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding Global Green Chemicals and SC Asset in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SC Asset and Global Green 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 Global Green Chemicals are associated (or correlated) with SC Asset. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SC Asset has no effect on the direction of Global Green i.e., Global Green and SC Asset go up and down completely randomly.
Pair Corralation between Global Green and SC Asset
Assuming the 90 days trading horizon Global Green is expected to generate 1.11 times less return on investment than SC Asset. In addition to that, Global Green is 1.0 times more volatile than SC Asset. It trades about 0.04 of its total potential returns per unit of risk. SC Asset is currently generating about 0.04 per unit of volatility. If you would invest 362.00 in SC Asset on September 12, 2024 and sell it today you would lose (70.00) from holding SC Asset or give up 19.34% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Global Green Chemicals vs. SC Asset
Performance |
| Timeline |
| Global Green Chemicals |
| SC Asset |
Global Green and SC Asset Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Global Green and SC Asset
The main advantage of trading using opposite Global Green and SC Asset positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Global Green position performs unexpectedly, SC Asset 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 SC Asset will offset losses from the drop in SC Asset's long position.| Global Green vs. Ichitan Group Public | Global Green vs. Indorama Ventures PCL | Global Green vs. BCPG Public | Global Green vs. IRPC Public |
| SC Asset vs. Phatra Leasing Public | SC Asset vs. Mitsib Leasing Public | SC Asset vs. AJ Advance Technology | SC Asset vs. Global Green Chemicals |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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