Correlation Between Golden Developing and Grey Cloak

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

By analyzing existing cross correlation between Golden Developing Solutions and Grey Cloak Tech, you can compare the effects of market volatilities on Golden Developing and Grey Cloak 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 Golden Developing with a short position of Grey Cloak. Check out your portfolio center. Please also check ongoing floating volatility patterns of Golden Developing and Grey Cloak.

Diversification Opportunities for Golden Developing and Grey Cloak

-0.33

Correlation Coefficient

Golden Developing  Grey Cloak

Very good diversification

The 3 months correlation between Golden and Grey is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding Golden Developing Solutions and Grey Cloak Tech in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Grey Cloak Tech and Golden Developing 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 Golden Developing Solutions are associated (or correlated) with Grey Cloak. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Grey Cloak Tech has no effect on the direction of Golden Developing i.e., Golden Developing and Grey Cloak go up and down completely randomly.

Pair Corralation between Golden Developing and Grey Cloak

Given the investment horizon of 90 days Golden Developing Solutions is expected to generate 16.03 times more return on investment than Grey Cloak. However, Golden Developing is 16.03 times more volatile than Grey Cloak Tech. It trades about 0.13 of its potential returns per unit of risk. Grey Cloak Tech is currently generating about -0.01 per unit of risk. If you would invest  0.00  in Golden Developing Solutions on December 27, 2024 and sell it today you would earn a total of  0.01  from holding Golden Developing Solutions or generate 9.223372036854776E16% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	93.75%
Values	Daily Returns

Golden Developing Solutions  vs.  Grey Cloak Tech

Golden Developing

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Golden Developing Solutions are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak essential indicators, Golden Developing reported solid returns over the last few months and may actually be approaching a breakup point.

Grey Cloak Tech

Risk-Adjusted Performance

Very Weak

Over the last 90 days Grey Cloak Tech has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong technical and fundamental indicators, Grey Cloak is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Golden Developing and Grey Cloak

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

The idea behind Golden Developing Solutions and Grey Cloak Tech 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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.