Correlation Between Red Hill and GO2 People
Can any of the company-specific risk be diversified away by investing in both Red Hill and GO2 People 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 Red Hill and GO2 People into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Red Hill Iron and GO2 People, you can compare the effects of market volatilities on Red Hill and GO2 People 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 Red Hill with a short position of GO2 People. Check out your portfolio center. Please also check ongoing floating volatility patterns of Red Hill and GO2 People.
Diversification Opportunities for Red Hill and GO2 People
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Red and GO2 is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Red Hill Iron and GO2 People in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GO2 People and Red Hill 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 Red Hill Iron are associated (or correlated) with GO2 People. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GO2 People has no effect on the direction of Red Hill i.e., Red Hill and GO2 People go up and down completely randomly.
Pair Corralation between Red Hill and GO2 People
Assuming the 90 days trading horizon Red Hill is expected to generate 28.49 times less return on investment than GO2 People. But when comparing it to its historical volatility, Red Hill Iron is 17.14 times less risky than GO2 People. It trades about 0.03 of its potential returns per unit of risk. GO2 People is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 1.10 in GO2 People on October 15, 2024 and sell it today you would earn a total of 65.90 from holding GO2 People or generate 5990.91% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 93.39% |
| Values | Daily Returns |
Red Hill Iron vs. GO2 People
Performance |
| Timeline |
| Red Hill Iron |
| GO2 People |
Red Hill and GO2 People Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Red Hill and GO2 People
The main advantage of trading using opposite Red Hill and GO2 People positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Red Hill position performs unexpectedly, GO2 People 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 GO2 People will offset losses from the drop in GO2 People's long position.| Red Hill vs. K2 Asset Management | Red Hill vs. Queste Communications | Red Hill vs. Charter Hall Retail | Red Hill vs. Cleanaway Waste Management |
| GO2 People vs. Richmond Vanadium Technology | GO2 People vs. 4Dmedical | GO2 People vs. Legacy Iron Ore | GO2 People vs. Red Hill Iron |
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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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