Correlation Between United States and Grimoldi
Can any of the company-specific risk be diversified away by investing in both United States and Grimoldi 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 United States and Grimoldi into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between United States Steel and Grimoldi SA, you can compare the effects of market volatilities on United States and Grimoldi 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 United States with a short position of Grimoldi. Check out your portfolio center. Please also check ongoing floating volatility patterns of United States and Grimoldi.
Diversification Opportunities for United States and Grimoldi
-0.59 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between United and Grimoldi is -0.59. Overlapping area represents the amount of risk that can be diversified away by holding United States Steel and Grimoldi SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Grimoldi SA and United States 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 United States Steel are associated (or correlated) with Grimoldi. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Grimoldi SA has no effect on the direction of United States i.e., United States and Grimoldi go up and down completely randomly.
Pair Corralation between United States and Grimoldi
Given the investment horizon of 90 days United States is expected to generate 2.08 times less return on investment than Grimoldi. In addition to that, United States is 1.17 times more volatile than Grimoldi SA. It trades about 0.04 of its total potential returns per unit of risk. Grimoldi SA is currently generating about 0.1 per unit of volatility. If you would invest 63,000 in Grimoldi SA on September 19, 2024 and sell it today you would earn a total of 72,000 from holding Grimoldi SA or generate 114.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
United States Steel vs. Grimoldi SA
Performance |
| Timeline |
| United States Steel |
| Grimoldi SA |
United States and Grimoldi Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with United States and Grimoldi
The main advantage of trading using opposite United States and Grimoldi positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if United States position performs unexpectedly, Grimoldi 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 Grimoldi will offset losses from the drop in Grimoldi's long position.| United States vs. Edesa Holding SA | United States vs. Vista Energy, SAB | United States vs. Pfizer Inc | United States vs. Molinos Agro SA |
| Grimoldi vs. Agrometal SAI | Grimoldi vs. Harmony Gold Mining | Grimoldi vs. Telecom Argentina | Grimoldi vs. Compania de Transporte |
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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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