Correlation Between MYFAIR GOLD and SOGECLAIR
Can any of the company-specific risk be diversified away by investing in both MYFAIR GOLD and SOGECLAIR 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 MYFAIR GOLD and SOGECLAIR into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MYFAIR GOLD P and SOGECLAIR SA INH, you can compare the effects of market volatilities on MYFAIR GOLD and SOGECLAIR 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 MYFAIR GOLD with a short position of SOGECLAIR. Check out your portfolio center. Please also check ongoing floating volatility patterns of MYFAIR GOLD and SOGECLAIR.
Diversification Opportunities for MYFAIR GOLD and SOGECLAIR
-0.09 | Correlation Coefficient |
Good diversification
The 3 months correlation between MYFAIR and SOGECLAIR is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding MYFAIR GOLD P and SOGECLAIR SA INH in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SOGECLAIR SA INH and MYFAIR GOLD 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 MYFAIR GOLD P are associated (or correlated) with SOGECLAIR. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SOGECLAIR SA INH has no effect on the direction of MYFAIR GOLD i.e., MYFAIR GOLD and SOGECLAIR go up and down completely randomly.
Pair Corralation between MYFAIR GOLD and SOGECLAIR
Assuming the 90 days horizon MYFAIR GOLD P is expected to generate 3.06 times more return on investment than SOGECLAIR. However, MYFAIR GOLD is 3.06 times more volatile than SOGECLAIR SA INH. It trades about 0.13 of its potential returns per unit of risk. SOGECLAIR SA INH is currently generating about 0.21 per unit of risk. If you would invest 143.00 in MYFAIR GOLD P on February 3, 2024 and sell it today you would earn a total of 17.00 from holding MYFAIR GOLD P or generate 11.89% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
MYFAIR GOLD P vs. SOGECLAIR SA INH
Performance |
Timeline |
MYFAIR GOLD P |
SOGECLAIR SA INH |
MYFAIR GOLD and SOGECLAIR Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with MYFAIR GOLD and SOGECLAIR
The main advantage of trading using opposite MYFAIR GOLD and SOGECLAIR positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MYFAIR GOLD position performs unexpectedly, SOGECLAIR 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 SOGECLAIR will offset losses from the drop in SOGECLAIR's long position.MYFAIR GOLD vs. Superior Plus Corp | MYFAIR GOLD vs. Origin Agritech | MYFAIR GOLD vs. Identiv | MYFAIR GOLD vs. INTUITIVE SURGICAL |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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