Correlation Between Golden Textiles and Contact Financial
Can any of the company-specific risk be diversified away by investing in both Golden Textiles and Contact Financial 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 Golden Textiles and Contact Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Golden Textiles Clothes and Contact Financial Holding, you can compare the effects of market volatilities on Golden Textiles and Contact Financial 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 Golden Textiles with a short position of Contact Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Golden Textiles and Contact Financial.
Diversification Opportunities for Golden Textiles and Contact Financial
0.41 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Golden and Contact is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding Golden Textiles Clothes and Contact Financial Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Contact Financial Holding and Golden Textiles 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 Golden Textiles Clothes are associated (or correlated) with Contact Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Contact Financial Holding has no effect on the direction of Golden Textiles i.e., Golden Textiles and Contact Financial go up and down completely randomly.
Pair Corralation between Golden Textiles and Contact Financial
Assuming the 90 days trading horizon Golden Textiles Clothes is expected to generate 1.29 times more return on investment than Contact Financial. However, Golden Textiles is 1.29 times more volatile than Contact Financial Holding. It trades about 0.1 of its potential returns per unit of risk. Contact Financial Holding is currently generating about 0.03 per unit of risk. If you would invest 718.00 in Golden Textiles Clothes on September 12, 2024 and sell it today you would earn a total of 1,786 from holding Golden Textiles Clothes or generate 248.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Golden Textiles Clothes vs. Contact Financial Holding
Performance |
| Timeline |
| Golden Textiles Clothes |
| Contact Financial Holding |
Golden Textiles and Contact Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Golden Textiles and Contact Financial
The main advantage of trading using opposite Golden Textiles and Contact Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Golden Textiles position performs unexpectedly, Contact Financial 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 Contact Financial will offset losses from the drop in Contact Financial's long position.| Golden Textiles vs. Paint Chemicals Industries | Golden Textiles vs. Reacap Financial Investments | Golden Textiles vs. Egyptians For Investment | Golden Textiles vs. Misr Oils Soap |
| Contact Financial vs. Paint Chemicals Industries | Contact Financial vs. Reacap Financial Investments | Contact Financial vs. Egyptians For Investment | Contact Financial vs. Misr Oils Soap |
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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
Other Complementary Tools
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios | |
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets | |
| Equity Valuation Check real value of public entities based on technical and fundamental data | |
| Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format | |
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume |