Correlation Between Golden Ventures and Lease IT
Can any of the company-specific risk be diversified away by investing in both Golden Ventures and Lease IT 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 Ventures and Lease IT into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Golden Ventures Leasehold and Lease IT Public, you can compare the effects of market volatilities on Golden Ventures and Lease IT 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 Ventures with a short position of Lease IT. Check out your portfolio center. Please also check ongoing floating volatility patterns of Golden Ventures and Lease IT.
Diversification Opportunities for Golden Ventures and Lease IT
0.03 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Golden and Lease is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding Golden Ventures Leasehold and Lease IT Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lease IT Public and Golden Ventures 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 Ventures Leasehold are associated (or correlated) with Lease IT. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lease IT Public has no effect on the direction of Golden Ventures i.e., Golden Ventures and Lease IT go up and down completely randomly.
Pair Corralation between Golden Ventures and Lease IT
Assuming the 90 days trading horizon Golden Ventures Leasehold is expected to generate 0.22 times more return on investment than Lease IT. However, Golden Ventures Leasehold is 4.58 times less risky than Lease IT. It trades about -0.08 of its potential returns per unit of risk. Lease IT Public is currently generating about -0.22 per unit of risk. If you would invest 664.00 in Golden Ventures Leasehold on October 7, 2024 and sell it today you would lose (9.00) from holding Golden Ventures Leasehold or give up 1.36% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Golden Ventures Leasehold vs. Lease IT Public
Performance |
| Timeline |
| Golden Ventures Leasehold |
| Lease IT Public |
Golden Ventures and Lease IT Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Golden Ventures and Lease IT
The main advantage of trading using opposite Golden Ventures and Lease IT positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Golden Ventures position performs unexpectedly, Lease IT 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 Lease IT will offset losses from the drop in Lease IT's long position.| Golden Ventures vs. Impact Growth REIT | Golden Ventures vs. CPN Retail Growth | Golden Ventures vs. WHA Premium Growth | Golden Ventures vs. LH Shopping Centers |
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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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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