Correlation Between Contact Financial and Grand Investment

Can any of the company-specific risk be diversified away by investing in both Contact Financial and Grand Investment 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 Contact Financial and Grand Investment into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Contact Financial Holding and Grand Investment Capital, you can compare the effects of market volatilities on Contact Financial and Grand Investment 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 Contact Financial with a short position of Grand Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Contact Financial and Grand Investment.

Diversification Opportunities for Contact Financial and Grand Investment

-0.18

Correlation Coefficient

Contact Financial  Grand Investment

Good diversification

The 3 months correlation between Contact and Grand is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding Contact Financial Holding and Grand Investment Capital in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Grand Investment Capital and Contact Financial 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 Contact Financial Holding are associated (or correlated) with Grand Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Grand Investment Capital has no effect on the direction of Contact Financial i.e., Contact Financial and Grand Investment go up and down completely randomly.

Pair Corralation between Contact Financial and Grand Investment

Assuming the 90 days trading horizon Contact Financial is expected to generate 10.1 times less return on investment than Grand Investment. In addition to that, Contact Financial is 1.16 times more volatile than Grand Investment Capital. It trades about 0.01 of its total potential returns per unit of risk. Grand Investment Capital is currently generating about 0.17 per unit of volatility. If you would invest  925.00  in Grand Investment Capital on October 26, 2024 and sell it today you would earn a total of  183.00  from holding Grand Investment Capital or generate 19.78% return on investment over 90 days.

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

Contact Financial Holding  vs.  Grand Investment Capital

Contact Financial Holding

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Contact Financial Holding are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable technical and fundamental indicators, Contact Financial is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Grand Investment Capital

Risk-Adjusted Performance

13 of 100

Good

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

Pair Trading with Contact Financial and Grand Investment

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

The idea behind Contact Financial Holding and Grand Investment Capital 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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.