Correlation Between TAL Education and GOLD ROAD
Can any of the company-specific risk be diversified away by investing in both TAL Education and GOLD ROAD 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 TAL Education and GOLD ROAD into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between TAL Education Group and GOLD ROAD RES, you can compare the effects of market volatilities on TAL Education and GOLD ROAD 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 TAL Education with a short position of GOLD ROAD. Check out your portfolio center. Please also check ongoing floating volatility patterns of TAL Education and GOLD ROAD.
Diversification Opportunities for TAL Education and GOLD ROAD
-0.27 | Correlation Coefficient |
Very good diversification
The 3 months correlation between TAL and GOLD is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding TAL Education Group and GOLD ROAD RES in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GOLD ROAD RES and TAL Education 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 TAL Education Group are associated (or correlated) with GOLD ROAD. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GOLD ROAD RES has no effect on the direction of TAL Education i.e., TAL Education and GOLD ROAD go up and down completely randomly.
Pair Corralation between TAL Education and GOLD ROAD
Assuming the 90 days trading horizon TAL Education Group is expected to under-perform the GOLD ROAD. In addition to that, TAL Education is 1.2 times more volatile than GOLD ROAD RES. It trades about -0.1 of its total potential returns per unit of risk. GOLD ROAD RES is currently generating about 0.29 per unit of volatility. If you would invest 124.00 in GOLD ROAD RES on October 16, 2024 and sell it today you would earn a total of 9.00 from holding GOLD ROAD RES or generate 7.26% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
TAL Education Group vs. GOLD ROAD RES
Performance |
| Timeline |
| TAL Education Group |
| GOLD ROAD RES |
TAL Education and GOLD ROAD Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with TAL Education and GOLD ROAD
The main advantage of trading using opposite TAL Education and GOLD ROAD positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if TAL Education position performs unexpectedly, GOLD ROAD 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 GOLD ROAD will offset losses from the drop in GOLD ROAD's long position.| TAL Education vs. Virtus Investment Partners | TAL Education vs. Ameriprise Financial | TAL Education vs. G III Apparel Group | TAL Education vs. Keck Seng Investments |
| GOLD ROAD vs. Mitsui Chemicals | GOLD ROAD vs. PENN NATL GAMING | GOLD ROAD vs. GameStop Corp | GOLD ROAD vs. GigaMedia |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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