Correlation Between General Interface and Concraft Holding

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

By analyzing existing cross correlation between General Interface Solution and Concraft Holding Co, you can compare the effects of market volatilities on General Interface and Concraft Holding 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 General Interface with a short position of Concraft Holding. Check out your portfolio center. Please also check ongoing floating volatility patterns of General Interface and Concraft Holding.

Diversification Opportunities for General Interface and Concraft Holding

0.81

Correlation Coefficient

General Interface  Concraft Holding

Very poor diversification

The 3 months correlation between General and Concraft is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding General Interface Solution and Concraft Holding Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Concraft Holding and General Interface 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 General Interface Solution are associated (or correlated) with Concraft Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Concraft Holding has no effect on the direction of General Interface i.e., General Interface and Concraft Holding go up and down completely randomly.

Pair Corralation between General Interface and Concraft Holding

Assuming the 90 days trading horizon General Interface Solution is expected to under-perform the Concraft Holding. In addition to that, General Interface is 1.08 times more volatile than Concraft Holding Co. It trades about -0.06 of its total potential returns per unit of risk. Concraft Holding Co is currently generating about 0.0 per unit of volatility. If you would invest  1,670  in Concraft Holding Co on October 27, 2024 and sell it today you would lose (15.00) from holding Concraft Holding Co or give up 0.9% of portfolio value over 90 days.

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

General Interface Solution  vs.  Concraft Holding Co

General Interface

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days General Interface Solution has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest weak performance, the Stock's basic indicators remain stable and the latest fuss on Wall Street may also be a sign of long-term gains for the venture sophisticated investors.

Concraft Holding

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Concraft Holding Co has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, Concraft Holding 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 General Interface and Concraft Holding

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

The idea behind General Interface Solution and Concraft Holding 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.