Correlation Between Giant Manufacturing and Danen Technology
Can any of the company-specific risk be diversified away by investing in both Giant Manufacturing and Danen Technology 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 Giant Manufacturing and Danen Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Giant Manufacturing Co and Danen Technology Corp, you can compare the effects of market volatilities on Giant Manufacturing and Danen Technology 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 Giant Manufacturing with a short position of Danen Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Giant Manufacturing and Danen Technology.
Diversification Opportunities for Giant Manufacturing and Danen Technology
0.33 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Giant and Danen is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding Giant Manufacturing Co and Danen Technology Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Danen Technology Corp and Giant Manufacturing 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 Giant Manufacturing Co are associated (or correlated) with Danen Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Danen Technology Corp has no effect on the direction of Giant Manufacturing i.e., Giant Manufacturing and Danen Technology go up and down completely randomly.
Pair Corralation between Giant Manufacturing and Danen Technology
Assuming the 90 days trading horizon Giant Manufacturing Co is expected to generate 1.01 times more return on investment than Danen Technology. However, Giant Manufacturing is 1.01 times more volatile than Danen Technology Corp. It trades about 0.04 of its potential returns per unit of risk. Danen Technology Corp is currently generating about -0.15 per unit of risk. If you would invest 15,300 in Giant Manufacturing Co on December 4, 2024 and sell it today you would earn a total of 500.00 from holding Giant Manufacturing Co or generate 3.27% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Giant Manufacturing Co vs. Danen Technology Corp
Performance |
Timeline |
Giant Manufacturing |
Danen Technology Corp |
Giant Manufacturing and Danen Technology Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Giant Manufacturing and Danen Technology
The main advantage of trading using opposite Giant Manufacturing and Danen Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Giant Manufacturing position performs unexpectedly, Danen Technology 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 Danen Technology will offset losses from the drop in Danen Technology's long position.Giant Manufacturing vs. Merida Industry Co | Giant Manufacturing vs. President Chain Store | Giant Manufacturing vs. Cheng Shin Rubber | Giant Manufacturing vs. Uni President Enterprises Corp |
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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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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