Correlation Between SGF Capital and East Coast
Can any of the company-specific risk be diversified away by investing in both SGF Capital and East Coast 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 SGF Capital and East Coast into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SGF Capital Public and East Coast Furnitech, you can compare the effects of market volatilities on SGF Capital and East Coast 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 SGF Capital with a short position of East Coast. Check out your portfolio center. Please also check ongoing floating volatility patterns of SGF Capital and East Coast.
Diversification Opportunities for SGF Capital and East Coast
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between SGF and East is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding SGF Capital Public and East Coast Furnitech in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on East Coast Furnitech and SGF Capital 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 SGF Capital Public are associated (or correlated) with East Coast. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of East Coast Furnitech has no effect on the direction of SGF Capital i.e., SGF Capital and East Coast go up and down completely randomly.
Pair Corralation between SGF Capital and East Coast
Assuming the 90 days trading horizon SGF Capital Public is expected to generate 0.77 times more return on investment than East Coast. However, SGF Capital Public is 1.3 times less risky than East Coast. It trades about -0.15 of its potential returns per unit of risk. East Coast Furnitech is currently generating about -0.4 per unit of risk. If you would invest 21.00 in SGF Capital Public on November 29, 2024 and sell it today you would lose (3.00) from holding SGF Capital Public or give up 14.29% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
SGF Capital Public vs. East Coast Furnitech
Performance |
| Timeline |
| SGF Capital Public |
| East Coast Furnitech |
SGF Capital and East Coast Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SGF Capital and East Coast
The main advantage of trading using opposite SGF Capital and East Coast positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SGF Capital position performs unexpectedly, East Coast 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 East Coast will offset losses from the drop in East Coast's long position.| SGF Capital vs. Power Solution Technologies | SGF Capital vs. RS Public | SGF Capital vs. Siam Steel International | SGF Capital vs. RPCG Public |
| East Coast vs. G Capital Public | East Coast vs. E for L | East Coast vs. Filter Vision Public | East Coast vs. Chewathai Public |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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