Correlation Between Grand Plastic and GameSparcs

Can any of the company-specific risk be diversified away by investing in both Grand Plastic and GameSparcs 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 Grand Plastic and GameSparcs into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Grand Plastic Technology and GameSparcs Co, you can compare the effects of market volatilities on Grand Plastic and GameSparcs 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 Grand Plastic with a short position of GameSparcs. Check out your portfolio center. Please also check ongoing floating volatility patterns of Grand Plastic and GameSparcs.

Diversification Opportunities for Grand Plastic and GameSparcs

0.49

Correlation Coefficient

Grand Plastic  GameSparcs

Very weak diversification

The 3 months correlation between Grand and GameSparcs is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding Grand Plastic Technology and GameSparcs Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GameSparcs and Grand Plastic 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 Grand Plastic Technology are associated (or correlated) with GameSparcs. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GameSparcs has no effect on the direction of Grand Plastic i.e., Grand Plastic and GameSparcs go up and down completely randomly.

Pair Corralation between Grand Plastic and GameSparcs

Assuming the 90 days trading horizon Grand Plastic Technology is expected to generate 1.08 times more return on investment than GameSparcs. However, Grand Plastic is 1.08 times more volatile than GameSparcs Co. It trades about 0.05 of its potential returns per unit of risk. GameSparcs Co is currently generating about 0.04 per unit of risk. If you would invest  160,000  in Grand Plastic Technology on September 5, 2024 and sell it today you would earn a total of  12,000  from holding Grand Plastic Technology or generate 7.5% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

Grand Plastic Technology  vs.  GameSparcs Co

Grand Plastic Technology

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Grand Plastic Technology are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, Grand Plastic may actually be approaching a critical reversion point that can send shares even higher in January 2025.

GameSparcs

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in GameSparcs Co are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, GameSparcs may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Grand Plastic and GameSparcs

The main advantage of trading using opposite Grand Plastic and GameSparcs positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Grand Plastic position performs unexpectedly, GameSparcs 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 GameSparcs will offset losses from the drop in GameSparcs' long position.

The idea behind Grand Plastic Technology and GameSparcs Co pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.