Correlation Between Gloria Material and Ever Supreme

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

By analyzing existing cross correlation between Gloria Material Technology and Ever Supreme Bio, you can compare the effects of market volatilities on Gloria Material and Ever Supreme 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 Gloria Material with a short position of Ever Supreme. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gloria Material and Ever Supreme.

Diversification Opportunities for Gloria Material and Ever Supreme

0.05

Correlation Coefficient

Gloria Material  Ever Supreme

Significant diversification

The 3 months correlation between Gloria and Ever is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding Gloria Material Technology and Ever Supreme Bio in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ever Supreme Bio and Gloria Material 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 Gloria Material Technology are associated (or correlated) with Ever Supreme. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ever Supreme Bio has no effect on the direction of Gloria Material i.e., Gloria Material and Ever Supreme go up and down completely randomly.

Pair Corralation between Gloria Material and Ever Supreme

Assuming the 90 days trading horizon Gloria Material Technology is expected to generate 1.55 times more return on investment than Ever Supreme. However, Gloria Material is 1.55 times more volatile than Ever Supreme Bio. It trades about -0.01 of its potential returns per unit of risk. Ever Supreme Bio is currently generating about -0.06 per unit of risk. If you would invest  4,775  in Gloria Material Technology on October 8, 2024 and sell it today you would lose (80.00) from holding Gloria Material Technology or give up 1.68% of portfolio value over 90 days.

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

Gloria Material Technology  vs.  Ever Supreme Bio

Gloria Material Tech

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Gloria Material Technology has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, Gloria Material is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Ever Supreme Bio

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Ever Supreme Bio has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, Ever Supreme is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pair Trading with Gloria Material and Ever Supreme

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

The idea behind Gloria Material Technology and Ever Supreme Bio 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.

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 Stocks Directory module to find actively traded stocks across global markets.