Correlation Between Great Eastern and Aluminum Corp
Can any of the company-specific risk be diversified away by investing in both Great Eastern and Aluminum Corp 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 Great Eastern and Aluminum Corp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Great Eastern Holdings and Aluminum Corp, you can compare the effects of market volatilities on Great Eastern and Aluminum Corp 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 Great Eastern with a short position of Aluminum Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Great Eastern and Aluminum Corp.
Diversification Opportunities for Great Eastern and Aluminum Corp
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Great and Aluminum is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Great Eastern Holdings and Aluminum Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aluminum Corp and Great Eastern 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 Great Eastern Holdings are associated (or correlated) with Aluminum Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aluminum Corp has no effect on the direction of Great Eastern i.e., Great Eastern and Aluminum Corp go up and down completely randomly.
Pair Corralation between Great Eastern and Aluminum Corp
If you would invest (100.00) in Aluminum Corp on February 6, 2024 and sell it today you would earn a total of 100.00 from holding Aluminum Corp or generate -100.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Great Eastern Holdings vs. Aluminum Corp
Performance |
| Timeline |
| Great Eastern Holdings |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
OK
| Aluminum Corp |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Great Eastern and Aluminum Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Great Eastern and Aluminum Corp
The main advantage of trading using opposite Great Eastern and Aluminum Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Great Eastern position performs unexpectedly, Aluminum Corp 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 Aluminum Corp will offset losses from the drop in Aluminum Corp's long position.| Great Eastern vs. Lincoln National | Great Eastern vs. FG Annuities Life | Great Eastern vs. Jackson Financial | Great Eastern vs. Brighthouse Financial |
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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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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