Correlation Between Great Sun and Grandblue Environment

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

By analyzing existing cross correlation between Great Sun Foods Co and Grandblue Environment Co, you can compare the effects of market volatilities on Great Sun and Grandblue Environment 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 Great Sun with a short position of Grandblue Environment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Great Sun and Grandblue Environment.

Diversification Opportunities for Great Sun and Grandblue Environment

0.58

Correlation Coefficient

Great Sun  Grandblue Environment

Very weak diversification

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

Pair Corralation between Great Sun and Grandblue Environment

Assuming the 90 days trading horizon Great Sun Foods Co is expected to under-perform the Grandblue Environment. In addition to that, Great Sun is 2.18 times more volatile than Grandblue Environment Co. It trades about -0.05 of its total potential returns per unit of risk. Grandblue Environment Co is currently generating about 0.29 per unit of volatility. If you would invest  2,152  in Grandblue Environment Co on September 26, 2024 and sell it today you would earn a total of  192.00  from holding Grandblue Environment Co or generate 8.92% return on investment over 90 days.

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

Great Sun Foods Co  vs.  Grandblue Environment Co

Great Sun Foods

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Great Sun Foods Co are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Great Sun sustained solid returns over the last few months and may actually be approaching a breakup point.

Grandblue Environment

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Grandblue Environment Co are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Grandblue Environment sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Great Sun and Grandblue Environment

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

The idea behind Great Sun Foods Co and Grandblue Environment 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.