Correlation Between Grand Ocean and Trade Van

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

By analyzing existing cross correlation between Grand Ocean Retail and Trade Van Information Services, you can compare the effects of market volatilities on Grand Ocean and Trade Van 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 Ocean with a short position of Trade Van. Check out your portfolio center. Please also check ongoing floating volatility patterns of Grand Ocean and Trade Van.

Diversification Opportunities for Grand Ocean and Trade Van

0.58

Correlation Coefficient

Grand Ocean  Trade Van

Very weak diversification

The 3 months correlation between Grand and Trade is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding Grand Ocean Retail and Trade Van Information Services in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Trade Van Information and Grand Ocean 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 Ocean Retail are associated (or correlated) with Trade Van. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Trade Van Information has no effect on the direction of Grand Ocean i.e., Grand Ocean and Trade Van go up and down completely randomly.

Pair Corralation between Grand Ocean and Trade Van

Assuming the 90 days trading horizon Grand Ocean Retail is expected to generate 4.85 times more return on investment than Trade Van. However, Grand Ocean is 4.85 times more volatile than Trade Van Information Services. It trades about 0.15 of its potential returns per unit of risk. Trade Van Information Services is currently generating about 0.18 per unit of risk. If you would invest  845.00  in Grand Ocean Retail on September 17, 2024 and sell it today you would earn a total of  395.00  from holding Grand Ocean Retail or generate 46.75% return on investment over 90 days.

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

Grand Ocean Retail  vs.  Trade Van Information Services

Grand Ocean Retail

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Grand Ocean Retail are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, Grand Ocean showed solid returns over the last few months and may actually be approaching a breakup point.

Trade Van Information

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Trade Van Information Services are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, Trade Van may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Grand Ocean and Trade Van

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

The idea behind Grand Ocean Retail and Trade Van Information Services 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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.