Correlation Between Goodyear Tire and SINGAPORE POST
Can any of the company-specific risk be diversified away by investing in both Goodyear Tire and SINGAPORE POST 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 Goodyear Tire and SINGAPORE POST into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Goodyear Tire Rubber and SINGAPORE POST, you can compare the effects of market volatilities on Goodyear Tire and SINGAPORE POST 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 Goodyear Tire with a short position of SINGAPORE POST. Check out your portfolio center. Please also check ongoing floating volatility patterns of Goodyear Tire and SINGAPORE POST.
Diversification Opportunities for Goodyear Tire and SINGAPORE POST
0.42 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Goodyear and SINGAPORE is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding Goodyear Tire Rubber and SINGAPORE POST in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SINGAPORE POST and Goodyear Tire 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 Goodyear Tire Rubber are associated (or correlated) with SINGAPORE POST. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SINGAPORE POST has no effect on the direction of Goodyear Tire i.e., Goodyear Tire and SINGAPORE POST go up and down completely randomly.
Pair Corralation between Goodyear Tire and SINGAPORE POST
Assuming the 90 days trading horizon Goodyear Tire is expected to generate 1.63 times less return on investment than SINGAPORE POST. In addition to that, Goodyear Tire is 1.23 times more volatile than SINGAPORE POST. It trades about 0.01 of its total potential returns per unit of risk. SINGAPORE POST is currently generating about 0.02 per unit of volatility. If you would invest 34.00 in SINGAPORE POST on August 27, 2024 and sell it today you would earn a total of 2.00 from holding SINGAPORE POST or generate 5.88% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Goodyear Tire Rubber vs. SINGAPORE POST
Performance |
| Timeline |
| Goodyear Tire Rubber |
| SINGAPORE POST |
Goodyear Tire and SINGAPORE POST Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Goodyear Tire and SINGAPORE POST
The main advantage of trading using opposite Goodyear Tire and SINGAPORE POST positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Goodyear Tire position performs unexpectedly, SINGAPORE POST 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 SINGAPORE POST will offset losses from the drop in SINGAPORE POST's long position.| Goodyear Tire vs. Apple Inc | Goodyear Tire vs. Apple Inc | Goodyear Tire vs. Apple Inc | Goodyear Tire vs. Apple Inc |
| SINGAPORE POST vs. Mitsubishi Materials | SINGAPORE POST vs. OFFICE DEPOT | SINGAPORE POST vs. Goodyear Tire Rubber | SINGAPORE POST vs. Eagle Materials |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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