Correlation Between Goff Corp and THK Co
Can any of the company-specific risk be diversified away by investing in both Goff Corp and THK Co 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 THK Co into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Goff Corp and THK Co Ltd, you can compare the effects of market volatilities on Goff Corp and THK Co 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 THK Co. Check out your portfolio center. Please also check ongoing floating volatility patterns of Goff Corp and THK Co.
Diversification Opportunities for Goff Corp and THK Co
Very good diversification
The 3 months correlation between Goff and THK is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding Goff Corp and THK Co Ltd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on THK Co 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 THK Co. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of THK Co has no effect on the direction of Goff Corp i.e., Goff Corp and THK Co go up and down completely randomly.
Pair Corralation between Goff Corp and THK Co
Given the investment horizon of 90 days Goff Corp is expected to generate 17.82 times more return on investment than THK Co. However, Goff Corp is 17.82 times more volatile than THK Co Ltd. It trades about 0.08 of its potential returns per unit of risk. THK Co Ltd is currently generating about 0.03 per unit of risk. If you would invest 0.88 in Goff Corp on September 4, 2024 and sell it today you would lose (0.01) from holding Goff Corp or give up 1.14% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.73% |
| Values | Daily Returns |
Goff Corp vs. THK Co Ltd
Performance |
| Timeline |
| Goff Corp |
| THK Co |
Goff Corp and THK Co Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Goff Corp and THK Co
The main advantage of trading using opposite Goff Corp and THK Co positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Goff Corp position performs unexpectedly, THK Co 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 THK Co will offset losses from the drop in THK Co's long position.| Goff Corp vs. Gemfields Group Limited | Goff Corp vs. Star Royalties | Goff Corp vs. Defiance Silver Corp | Goff Corp vs. Diamond Fields Resources |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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