Correlation Between Maha Energy and GomSpace Group
Can any of the company-specific risk be diversified away by investing in both Maha Energy and GomSpace Group 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 Maha Energy and GomSpace Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Maha Energy AB and GomSpace Group AB, you can compare the effects of market volatilities on Maha Energy and GomSpace Group 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 Maha Energy with a short position of GomSpace Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Maha Energy and GomSpace Group.
Diversification Opportunities for Maha Energy and GomSpace Group
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Maha and GomSpace is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Maha Energy AB and GomSpace Group AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GomSpace Group AB and Maha Energy 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 Maha Energy AB are associated (or correlated) with GomSpace Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GomSpace Group AB has no effect on the direction of Maha Energy i.e., Maha Energy and GomSpace Group go up and down completely randomly.
Pair Corralation between Maha Energy and GomSpace Group
Assuming the 90 days trading horizon Maha Energy AB is expected to under-perform the GomSpace Group. But the stock apears to be less risky and, when comparing its historical volatility, Maha Energy AB is 2.33 times less risky than GomSpace Group. The stock trades about -0.02 of its potential returns per unit of risk. The GomSpace Group AB is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 541.00 in GomSpace Group AB on August 26, 2024 and sell it today you would lose (92.00) from holding GomSpace Group AB or give up 17.01% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Maha Energy AB vs. GomSpace Group AB
Performance |
| Timeline |
| Maha Energy AB |
| GomSpace Group AB |
Maha Energy and GomSpace Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Maha Energy and GomSpace Group
The main advantage of trading using opposite Maha Energy and GomSpace Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Maha Energy position performs unexpectedly, GomSpace Group 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 GomSpace Group will offset losses from the drop in GomSpace Group's long position.| Maha Energy vs. GomSpace Group AB | Maha Energy vs. SaltX Technology Holding | Maha Energy vs. Ambu AS | Maha Energy vs. Fingerprint Cards AB |
| GomSpace Group vs. Ambu AS | GomSpace Group vs. Bavarian Nordic | GomSpace Group vs. Fingerprint Cards AB | GomSpace Group vs. Zealand Pharma AS |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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