Correlation Between Indo Global and GelStat Corp
Can any of the company-specific risk be diversified away by investing in both Indo Global and GelStat Corp 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 Indo Global and GelStat Corp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Indo Global Exchange and GelStat Corp, you can compare the effects of market volatilities on Indo Global and GelStat Corp 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 Indo Global with a short position of GelStat Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Indo Global and GelStat Corp.
Diversification Opportunities for Indo Global and GelStat Corp
0.06 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Indo and GelStat is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding Indo Global Exchange and GelStat Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GelStat Corp and Indo Global 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 Indo Global Exchange are associated (or correlated) with GelStat Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GelStat Corp has no effect on the direction of Indo Global i.e., Indo Global and GelStat Corp go up and down completely randomly.
Pair Corralation between Indo Global and GelStat Corp
Given the investment horizon of 90 days Indo Global is expected to generate 6.07 times less return on investment than GelStat Corp. But when comparing it to its historical volatility, Indo Global Exchange is 1.62 times less risky than GelStat Corp. It trades about 0.02 of its potential returns per unit of risk. GelStat Corp is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 0.13 in GelStat Corp on August 30, 2024 and sell it today you would lose (0.10) from holding GelStat Corp or give up 76.92% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Indo Global Exchange vs. GelStat Corp
Performance |
| Timeline |
| Indo Global Exchange |
| GelStat Corp |
Indo Global and GelStat Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Indo Global and GelStat Corp
The main advantage of trading using opposite Indo Global and GelStat Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Indo Global position performs unexpectedly, GelStat Corp 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 GelStat Corp will offset losses from the drop in GelStat Corp's long position.| Indo Global vs. Cann American Corp | Indo Global vs. GelStat Corp | Indo Global vs. Green Cures Botanical | Indo Global vs. For The Earth |
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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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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