Correlation Between Galexxy Holdings and Link Reservations
Can any of the company-specific risk be diversified away by investing in both Galexxy Holdings and Link Reservations 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 Galexxy Holdings and Link Reservations into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Galexxy Holdings and Link Reservations, you can compare the effects of market volatilities on Galexxy Holdings and Link Reservations 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 Galexxy Holdings with a short position of Link Reservations. Check out your portfolio center. Please also check ongoing floating volatility patterns of Galexxy Holdings and Link Reservations.
Diversification Opportunities for Galexxy Holdings and Link Reservations
0.37 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Galexxy and Link is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding Galexxy Holdings and Link Reservations in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Link Reservations and Galexxy Holdings 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 Galexxy Holdings are associated (or correlated) with Link Reservations. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Link Reservations has no effect on the direction of Galexxy Holdings i.e., Galexxy Holdings and Link Reservations go up and down completely randomly.
Pair Corralation between Galexxy Holdings and Link Reservations
Given the investment horizon of 90 days Galexxy Holdings is expected to under-perform the Link Reservations. But the pink sheet apears to be less risky and, when comparing its historical volatility, Galexxy Holdings is 2.48 times less risky than Link Reservations. The pink sheet trades about -0.02 of its potential returns per unit of risk. The Link Reservations is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 0.40 in Link Reservations on August 28, 2024 and sell it today you would lose (0.30) from holding Link Reservations or give up 75.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 99.72% |
| Values | Daily Returns |
Galexxy Holdings vs. Link Reservations
Performance |
| Timeline |
| Galexxy Holdings |
| Link Reservations |
Galexxy Holdings and Link Reservations Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Galexxy Holdings and Link Reservations
The main advantage of trading using opposite Galexxy Holdings and Link Reservations positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Galexxy Holdings position performs unexpectedly, Link Reservations 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 Link Reservations will offset losses from the drop in Link Reservations' long position.| Galexxy Holdings vs. Genesis Electronics Group | Galexxy Holdings vs. Nextmart | Galexxy Holdings vs. Emergent Health Corp | Galexxy Holdings vs. Goff Corp |
| Link Reservations vs. Element Solutions | Link Reservations vs. Orion Engineered Carbons | Link Reservations vs. Minerals Technologies | Link Reservations vs. Ingevity Corp |
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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