Correlation Between Grande Asset and Green Resources
Can any of the company-specific risk be diversified away by investing in both Grande Asset and Green Resources 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 Grande Asset and Green Resources into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Grande Asset Hotels and Green Resources Public, you can compare the effects of market volatilities on Grande Asset and Green Resources 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 Grande Asset with a short position of Green Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Grande Asset and Green Resources.
Diversification Opportunities for Grande Asset and Green Resources
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Grande and Green is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Grande Asset Hotels and Green Resources Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Green Resources Public and Grande Asset 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 Grande Asset Hotels are associated (or correlated) with Green Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Green Resources Public has no effect on the direction of Grande Asset i.e., Grande Asset and Green Resources go up and down completely randomly.
Pair Corralation between Grande Asset and Green Resources
Assuming the 90 days trading horizon Grande Asset Hotels is expected to under-perform the Green Resources. In addition to that, Grande Asset is 2.97 times more volatile than Green Resources Public. It trades about -0.1 of its total potential returns per unit of risk. Green Resources Public is currently generating about 0.06 per unit of volatility. If you would invest 108.00 in Green Resources Public on September 2, 2024 and sell it today you would earn a total of 3.00 from holding Green Resources Public or generate 2.78% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Grande Asset Hotels vs. Green Resources Public
Performance |
| Timeline |
| Grande Asset Hotels |
| Green Resources Public |
Grande Asset and Green Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Grande Asset and Green Resources
The main advantage of trading using opposite Grande Asset and Green Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Grande Asset position performs unexpectedly, Green Resources 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 Green Resources will offset losses from the drop in Green Resources' long position.| Grande Asset vs. Turnkey Communication Services | Grande Asset vs. Digital Telecommunications Infrastructure | Grande Asset vs. Lohakit Metal Public | Grande Asset vs. CPR Gomu Industrial |
| Green Resources vs. Ekarat Engineering Public | Green Resources vs. Global Power Synergy | Green Resources vs. BCPG Public | Green Resources vs. IRPC 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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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