Correlation Between Stock Exchange and Grand Prix
Can any of the company-specific risk be diversified away by investing in both Stock Exchange and Grand Prix 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 Stock Exchange and Grand Prix into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Stock Exchange Of and Grand Prix International, you can compare the effects of market volatilities on Stock Exchange and Grand Prix 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 Stock Exchange with a short position of Grand Prix. Check out your portfolio center. Please also check ongoing floating volatility patterns of Stock Exchange and Grand Prix.
Diversification Opportunities for Stock Exchange and Grand Prix
-0.29 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Stock and Grand is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding Stock Exchange Of and Grand Prix International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Grand Prix International and Stock Exchange 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 Stock Exchange Of are associated (or correlated) with Grand Prix. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Grand Prix International has no effect on the direction of Stock Exchange i.e., Stock Exchange and Grand Prix go up and down completely randomly.
Pair Corralation between Stock Exchange and Grand Prix
Assuming the 90 days trading horizon Stock Exchange Of is expected to under-perform the Grand Prix. But the index apears to be less risky and, when comparing its historical volatility, Stock Exchange Of is 75.33 times less risky than Grand Prix. The index trades about -0.06 of its potential returns per unit of risk. The Grand Prix International is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 142.00 in Grand Prix International on November 28, 2024 and sell it today you would earn a total of 31.00 from holding Grand Prix International or generate 21.83% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.69% |
| Values | Daily Returns |
Stock Exchange Of vs. Grand Prix International
Performance |
| Timeline |
Stock Exchange and Grand Prix Volatility Contrast
Predicted Return Density |
| Returns |
Stock Exchange Of
Pair trading matchups for Stock Exchange
Grand Prix International
Pair trading matchups for Grand Prix
Pair Trading with Stock Exchange and Grand Prix
The main advantage of trading using opposite Stock Exchange and Grand Prix positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Stock Exchange position performs unexpectedly, Grand Prix 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 Grand Prix will offset losses from the drop in Grand Prix's long position.| Stock Exchange vs. Amanah Leasing Public | Stock Exchange vs. Symphony Communication Public | Stock Exchange vs. Micro Leasing Public | Stock Exchange vs. Planet Communications Asia |
| Grand Prix vs. Interlink Communication Public | Grand Prix vs. Aqua Public | Grand Prix vs. BEC World Public | Grand Prix vs. Grande Asset Hotels |
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 Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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