Correlation Between Global Health and Gujarat Fluorochemicals
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By analyzing existing cross correlation between Global Health Limited and Gujarat Fluorochemicals Limited, you can compare the effects of market volatilities on Global Health and Gujarat Fluorochemicals 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 Global Health with a short position of Gujarat Fluorochemicals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Global Health and Gujarat Fluorochemicals.
Diversification Opportunities for Global Health and Gujarat Fluorochemicals
-0.37 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Global and Gujarat is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding Global Health Limited and Gujarat Fluorochemicals Limite in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gujarat Fluorochemicals and Global Health 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 Global Health Limited are associated (or correlated) with Gujarat Fluorochemicals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gujarat Fluorochemicals has no effect on the direction of Global Health i.e., Global Health and Gujarat Fluorochemicals go up and down completely randomly.
Pair Corralation between Global Health and Gujarat Fluorochemicals
Assuming the 90 days trading horizon Global Health Limited is expected to generate 1.03 times more return on investment than Gujarat Fluorochemicals. However, Global Health is 1.03 times more volatile than Gujarat Fluorochemicals Limited. It trades about 0.08 of its potential returns per unit of risk. Gujarat Fluorochemicals Limited is currently generating about -0.14 per unit of risk. If you would invest 107,270 in Global Health Limited on August 29, 2024 and sell it today you would earn a total of 2,950 from holding Global Health Limited or generate 2.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Global Health Limited vs. Gujarat Fluorochemicals Limite
Performance |
| Timeline |
| Global Health Limited |
| Gujarat Fluorochemicals |
Global Health and Gujarat Fluorochemicals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Global Health and Gujarat Fluorochemicals
The main advantage of trading using opposite Global Health and Gujarat Fluorochemicals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Global Health position performs unexpectedly, Gujarat Fluorochemicals 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 Gujarat Fluorochemicals will offset losses from the drop in Gujarat Fluorochemicals' long position.| Global Health vs. Indian Railway Finance | Global Health vs. Cholamandalam Financial Holdings | Global Health vs. Reliance Industries Limited | Global Health vs. Tata Consultancy Services |
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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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