Correlation Between Concord Securities and Good Finance

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

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

Diversification Opportunities for Concord Securities and Good Finance

0.58

Correlation Coefficient

Concord Securities  Good Finance

Very weak diversification

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

Pair Corralation between Concord Securities and Good Finance

Assuming the 90 days trading horizon Concord Securities Co is expected to under-perform the Good Finance. But the stock apears to be less risky and, when comparing its historical volatility, Concord Securities Co is 1.01 times less risky than Good Finance. The stock trades about 0.0 of its potential returns per unit of risk. The Good Finance Securities is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest  1,755  in Good Finance Securities on September 18, 2024 and sell it today you would earn a total of  610.00  from holding Good Finance Securities or generate 34.76% return on investment over 90 days.

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

Concord Securities Co  vs.  Good Finance Securities

Concord Securities

Risk-Adjusted Performance

0 of 100

Very Weak

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

Good Finance Securities

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Good Finance Securities are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, Good Finance may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Concord Securities and Good Finance

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

The idea behind Concord Securities Co and Good Finance Securities 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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.