Correlation Between Medical Packaging and Golden Textiles
Can any of the company-specific risk be diversified away by investing in both Medical Packaging and Golden Textiles 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 Medical Packaging and Golden Textiles into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Medical Packaging and Golden Textiles Clothes, you can compare the effects of market volatilities on Medical Packaging and Golden Textiles 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 Medical Packaging with a short position of Golden Textiles. Check out your portfolio center. Please also check ongoing floating volatility patterns of Medical Packaging and Golden Textiles.
Diversification Opportunities for Medical Packaging and Golden Textiles
-0.23 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Medical and Golden is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding Medical Packaging and Golden Textiles Clothes in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Golden Textiles Clothes and Medical Packaging 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 Medical Packaging are associated (or correlated) with Golden Textiles. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Golden Textiles Clothes has no effect on the direction of Medical Packaging i.e., Medical Packaging and Golden Textiles go up and down completely randomly.
Pair Corralation between Medical Packaging and Golden Textiles
Assuming the 90 days trading horizon Medical Packaging is expected to generate 1.42 times less return on investment than Golden Textiles. In addition to that, Medical Packaging is 1.05 times more volatile than Golden Textiles Clothes. It trades about 0.06 of its total potential returns per unit of risk. Golden Textiles Clothes is currently generating about 0.1 per unit of volatility. If you would invest 718.00 in Golden Textiles Clothes on September 12, 2024 and sell it today you would earn a total of 1,786 from holding Golden Textiles Clothes or generate 248.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 74.81% |
| Values | Daily Returns |
Medical Packaging vs. Golden Textiles Clothes
Performance |
| Timeline |
| Medical Packaging |
| Golden Textiles Clothes |
Medical Packaging and Golden Textiles Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Medical Packaging and Golden Textiles
The main advantage of trading using opposite Medical Packaging and Golden Textiles positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Medical Packaging position performs unexpectedly, Golden Textiles 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 Golden Textiles will offset losses from the drop in Golden Textiles' long position.| Medical Packaging vs. Paint Chemicals Industries | Medical Packaging vs. Reacap Financial Investments | Medical Packaging vs. Egyptians For Investment | Medical Packaging vs. Misr Oils Soap |
| Golden Textiles vs. Paint Chemicals Industries | Golden Textiles vs. Reacap Financial Investments | Golden Textiles vs. Egyptians For Investment | Golden Textiles vs. Misr Oils Soap |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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