Correlation Between Gratifii and CSL
Can any of the company-specific risk be diversified away by investing in both Gratifii and CSL 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 Gratifii and CSL into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Gratifii and CSL, you can compare the effects of market volatilities on Gratifii and CSL 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 Gratifii with a short position of CSL. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gratifii and CSL.
Diversification Opportunities for Gratifii and CSL
Very good diversification
The 3 months correlation between Gratifii and CSL is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding Gratifii and CSL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CSL and Gratifii 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 Gratifii are associated (or correlated) with CSL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CSL has no effect on the direction of Gratifii i.e., Gratifii and CSL go up and down completely randomly.
Pair Corralation between Gratifii and CSL
Assuming the 90 days trading horizon Gratifii is expected to generate 9.98 times more return on investment than CSL. However, Gratifii is 9.98 times more volatile than CSL. It trades about 0.04 of its potential returns per unit of risk. CSL is currently generating about 0.02 per unit of risk. If you would invest 1.30 in Gratifii on August 28, 2024 and sell it today you would lose (0.60) from holding Gratifii or give up 46.15% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Gratifii vs. CSL
Performance |
| Timeline |
| Gratifii |
| CSL |
Gratifii and CSL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gratifii and CSL
The main advantage of trading using opposite Gratifii and CSL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gratifii position performs unexpectedly, CSL 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 CSL will offset losses from the drop in CSL's long position.| Gratifii vs. Autosports Group | Gratifii vs. Centaurus Metals | Gratifii vs. Black Rock Mining | Gratifii vs. Pinnacle Investment Management |
| CSL vs. Regal Investment | CSL vs. MFF Capital Investments | CSL vs. Mirrabooka Investments | CSL vs. Viva Leisure |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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