Correlation Between Continental Beverage and Gold Ent

Can any of the company-specific risk be diversified away by investing in both Continental Beverage and Gold Ent 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 Continental Beverage and Gold Ent into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Continental Beverage Brands and Gold Ent Group, you can compare the effects of market volatilities on Continental Beverage and Gold Ent 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 Continental Beverage with a short position of Gold Ent. Check out your portfolio center. Please also check ongoing floating volatility patterns of Continental Beverage and Gold Ent.

Diversification Opportunities for Continental Beverage and Gold Ent

0.0

Correlation Coefficient

Continental Beverage  Gold Ent

Pay attention - limited upside

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

Pair Corralation between Continental Beverage and Gold Ent

If you would invest  0.02  in Gold Ent Group on December 29, 2024 and sell it today you would lose (0.01) from holding Gold Ent Group or give up 50.0% of portfolio value over 90 days.

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

Continental Beverage Brands  vs.  Gold Ent Group

Continental Beverage

Risk-Adjusted Performance

Very Weak

Over the last 90 days Continental Beverage Brands has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong fundamental drivers, Continental Beverage is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Gold Ent Group

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Gold Ent Group are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak technical and fundamental indicators, Gold Ent reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Continental Beverage and Gold Ent

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

The idea behind Continental Beverage Brands and Gold Ent 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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.