Correlation Between Golden Textiles and International
Can any of the company-specific risk be diversified away by investing in both Golden Textiles and International 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 International 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 International Co For, you can compare the effects of market volatilities on Golden Textiles and International 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 International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Golden Textiles and International.
Diversification Opportunities for Golden Textiles and International
-0.3 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Golden and International is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding Golden Textiles Clothes and International Co For in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on International Co For 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 International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of International Co For has no effect on the direction of Golden Textiles i.e., Golden Textiles and International go up and down completely randomly.
Pair Corralation between Golden Textiles and International
Assuming the 90 days trading horizon Golden Textiles Clothes is expected to generate 1.2 times more return on investment than International. However, Golden Textiles is 1.2 times more volatile than International Co For. It trades about 0.01 of its potential returns per unit of risk. International Co For is currently generating about -0.02 per unit of risk. If you would invest 2,802 in Golden Textiles Clothes on September 20, 2024 and sell it today you would lose (239.00) from holding Golden Textiles Clothes or give up 8.53% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Golden Textiles Clothes vs. International Co For
Performance |
| Timeline |
| Golden Textiles Clothes |
| International Co For |
Golden Textiles and International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Golden Textiles and International
The main advantage of trading using opposite Golden Textiles and International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Golden Textiles position performs unexpectedly, International 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 International will offset losses from the drop in International'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 |
| International vs. B Investments Holding | International vs. Egyptians For Investment | International vs. Dice Sport Casual | International vs. Golden Textiles Clothes |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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