Correlation Between LANDSEA GREEN and GOODTECH ASA

Can any of the company-specific risk be diversified away by investing in both LANDSEA GREEN and GOODTECH ASA 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 LANDSEA GREEN and GOODTECH ASA into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between LANDSEA GREEN MANAGEMENT and GOODTECH ASA A, you can compare the effects of market volatilities on LANDSEA GREEN and GOODTECH ASA 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 LANDSEA GREEN with a short position of GOODTECH ASA. Check out your portfolio center. Please also check ongoing floating volatility patterns of LANDSEA GREEN and GOODTECH ASA.

Diversification Opportunities for LANDSEA GREEN and GOODTECH ASA

0.0

Correlation Coefficient

LANDSEA GREEN  GOODTECH ASA

Pay attention - limited upside

The 3 months correlation between LANDSEA and GOODTECH is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding LANDSEA GREEN MANAGEMENT and GOODTECH ASA A in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GOODTECH ASA A and LANDSEA GREEN 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 LANDSEA GREEN MANAGEMENT are associated (or correlated) with GOODTECH ASA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GOODTECH ASA A has no effect on the direction of LANDSEA GREEN i.e., LANDSEA GREEN and GOODTECH ASA go up and down completely randomly.

Pair Corralation between LANDSEA GREEN and GOODTECH ASA

Assuming the 90 days horizon LANDSEA GREEN MANAGEMENT is expected to generate 87.39 times more return on investment than GOODTECH ASA. However, LANDSEA GREEN is 87.39 times more volatile than GOODTECH ASA A. It trades about 0.17 of its potential returns per unit of risk. GOODTECH ASA A is currently generating about -0.07 per unit of risk. If you would invest  0.10  in LANDSEA GREEN MANAGEMENT on December 24, 2024 and sell it today you would earn a total of  0.00  from holding LANDSEA GREEN MANAGEMENT or generate 0.0% return on investment over 90 days.

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

LANDSEA GREEN MANAGEMENT  vs.  GOODTECH ASA A

LANDSEA GREEN MANAGEMENT

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in LANDSEA GREEN MANAGEMENT are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. Despite nearly uncertain basic indicators, LANDSEA GREEN reported solid returns over the last few months and may actually be approaching a breakup point.

GOODTECH ASA A

Risk-Adjusted Performance

Very Weak

Over the last 90 days GOODTECH ASA A has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest uncertain performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Pair Trading with LANDSEA GREEN and GOODTECH ASA

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

The idea behind LANDSEA GREEN MANAGEMENT and GOODTECH ASA A 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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.