Correlation Between GelStat Corp and China SXT
Can any of the company-specific risk be diversified away by investing in both GelStat Corp and China SXT 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 GelStat Corp and China SXT into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GelStat Corp and China SXT Pharmaceuticals, you can compare the effects of market volatilities on GelStat Corp and China SXT 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 GelStat Corp with a short position of China SXT. Check out your portfolio center. Please also check ongoing floating volatility patterns of GelStat Corp and China SXT.
Diversification Opportunities for GelStat Corp and China SXT
-0.18 | Correlation Coefficient |
Good diversification
The 3 months correlation between GelStat and China is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding GelStat Corp and China SXT Pharmaceuticals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China SXT Pharmaceuticals and GelStat Corp 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 GelStat Corp are associated (or correlated) with China SXT. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of China SXT Pharmaceuticals has no effect on the direction of GelStat Corp i.e., GelStat Corp and China SXT go up and down completely randomly.
Pair Corralation between GelStat Corp and China SXT
Given the investment horizon of 90 days GelStat Corp is expected to generate 2.74 times more return on investment than China SXT. However, GelStat Corp is 2.74 times more volatile than China SXT Pharmaceuticals. It trades about 0.06 of its potential returns per unit of risk. China SXT Pharmaceuticals is currently generating about -0.36 per unit of risk. If you would invest 0.04 in GelStat Corp on August 27, 2024 and sell it today you would earn a total of 0.00 from holding GelStat Corp 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 |
GelStat Corp vs. China SXT Pharmaceuticals
Performance |
| Timeline |
| GelStat Corp |
| China SXT Pharmaceuticals |
GelStat Corp and China SXT Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GelStat Corp and China SXT
The main advantage of trading using opposite GelStat Corp and China SXT positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GelStat Corp position performs unexpectedly, China SXT 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 China SXT will offset losses from the drop in China SXT's long position.| GelStat Corp vs. Rezolute | GelStat Corp vs. Tempest Therapeutics | GelStat Corp vs. Forte Biosciences | GelStat Corp vs. Dyadic International |
| China SXT vs. Akanda Corp | China SXT vs. Petros Pharmaceuticals | China SXT vs. GelStat Corp | China SXT vs. Shuttle Pharmaceuticals |
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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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