Correlation Between Pou Chen and Gordon Auto

Can any of the company-specific risk be diversified away by investing in both Pou Chen and Gordon Auto 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 Pou Chen and Gordon Auto into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Pou Chen Corp and Gordon Auto Body, you can compare the effects of market volatilities on Pou Chen and Gordon Auto 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 Pou Chen with a short position of Gordon Auto. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pou Chen and Gordon Auto.

Diversification Opportunities for Pou Chen and Gordon Auto

0.0

Correlation Coefficient

Pou Chen  Gordon Auto

Pay attention - limited upside

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

Pair Corralation between Pou Chen and Gordon Auto

If you would invest  3,680  in Pou Chen Corp on October 1, 2024 and sell it today you would earn a total of  155.00  from holding Pou Chen Corp or generate 4.21% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Pou Chen Corp  vs.  Gordon Auto Body

Pou Chen Corp

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Pou Chen Corp are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of fairly stable basic indicators, Pou Chen is not utilizing all of its potentials. The current stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Gordon Auto Body

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Gordon Auto Body are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak basic indicators, Gordon Auto may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Pou Chen and Gordon Auto

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

The idea behind Pou Chen Corp and Gordon Auto Body 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.