Correlation Between Arrow Electronics and Golden Matrix

Can any of the company-specific risk be diversified away by investing in both Arrow Electronics and Golden Matrix 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 Arrow Electronics and Golden Matrix into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Arrow Electronics and Golden Matrix Group, you can compare the effects of market volatilities on Arrow Electronics and Golden Matrix 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 Arrow Electronics with a short position of Golden Matrix. Check out your portfolio center. Please also check ongoing floating volatility patterns of Arrow Electronics and Golden Matrix.

Diversification Opportunities for Arrow Electronics and Golden Matrix

-0.11

Correlation Coefficient

Arrow Electronics  Golden Matrix

Good diversification

The 3 months correlation between Arrow and Golden is -0.11. Overlapping area represents the amount of risk that can be diversified away by holding Arrow Electronics and Golden Matrix Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Golden Matrix Group and Arrow Electronics 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 Arrow Electronics are associated (or correlated) with Golden Matrix. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Golden Matrix Group has no effect on the direction of Arrow Electronics i.e., Arrow Electronics and Golden Matrix go up and down completely randomly.

Pair Corralation between Arrow Electronics and Golden Matrix

Considering the 90-day investment horizon Arrow Electronics is expected to generate 0.51 times more return on investment than Golden Matrix. However, Arrow Electronics is 1.97 times less risky than Golden Matrix. It trades about -0.21 of its potential returns per unit of risk. Golden Matrix Group is currently generating about -0.25 per unit of risk. If you would invest  12,016  in Arrow Electronics on September 30, 2024 and sell it today you would lose (619.00) from holding Arrow Electronics or give up 5.15% of portfolio value over 90 days.

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

Arrow Electronics  vs.  Golden Matrix Group

Arrow Electronics

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Arrow Electronics has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's basic indicators remain fairly stable which may send shares a bit higher in January 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

Golden Matrix Group

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Golden Matrix Group has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest uncertain performance, the Stock's technical and fundamental indicators remain strong and the recent confusion on Wall Street may also be a sign of long-lasting gains for the firm traders.

Pair Trading with Arrow Electronics and Golden Matrix

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

The idea behind Arrow Electronics and Golden Matrix Group 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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.