Correlation Between Goff Corp and Green Cures
Can any of the company-specific risk be diversified away by investing in both Goff Corp and Green Cures 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 Goff Corp and Green Cures into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Goff Corp and Green Cures Botanical, you can compare the effects of market volatilities on Goff Corp and Green Cures 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 Goff Corp with a short position of Green Cures. Check out your portfolio center. Please also check ongoing floating volatility patterns of Goff Corp and Green Cures.
Diversification Opportunities for Goff Corp and Green Cures
-0.11 | Correlation Coefficient |
Good diversification
The 3 months correlation between Goff and Green is -0.11. Overlapping area represents the amount of risk that can be diversified away by holding Goff Corp and Green Cures Botanical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Green Cures Botanical and Goff Corp 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 Goff Corp are associated (or correlated) with Green Cures. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Green Cures Botanical has no effect on the direction of Goff Corp i.e., Goff Corp and Green Cures go up and down completely randomly.
Pair Corralation between Goff Corp and Green Cures
Given the investment horizon of 90 days Goff Corp is expected to generate 4.15 times less return on investment than Green Cures. But when comparing it to its historical volatility, Goff Corp is 1.96 times less risky than Green Cures. It trades about 0.11 of its potential returns per unit of risk. Green Cures Botanical is currently generating about 0.24 of returns per unit of risk over similar time horizon. If you would invest 0.01 in Green Cures Botanical on September 25, 2024 and sell it today you would earn a total of 0.01 from holding Green Cures Botanical or generate 100.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Goff Corp vs. Green Cures Botanical
Performance |
| Timeline |
| Goff Corp |
| Green Cures Botanical |
Goff Corp and Green Cures Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Goff Corp and Green Cures
The main advantage of trading using opposite Goff Corp and Green Cures positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Goff Corp position performs unexpectedly, Green Cures 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 Green Cures will offset losses from the drop in Green Cures' long position.| Goff Corp vs. Impala Platinum Holdings | Goff Corp vs. Fresnillo PLC | Goff Corp vs. Compania de Minas | Goff Corp vs. Triple Flag Precious |
| Green Cures vs. Genesis Electronics Group | Green Cures vs. Nextmart | Green Cures vs. Emergent Health Corp | Green Cures vs. Goff Corp |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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