Correlation Between Goldenstone Acquisition and Daiwa Securities

Can any of the company-specific risk be diversified away by investing in both Goldenstone Acquisition and Daiwa Securities 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 Goldenstone Acquisition and Daiwa Securities into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Goldenstone Acquisition Limited and Daiwa Securities Group, you can compare the effects of market volatilities on Goldenstone Acquisition and Daiwa Securities 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 Goldenstone Acquisition with a short position of Daiwa Securities. Check out your portfolio center. Please also check ongoing floating volatility patterns of Goldenstone Acquisition and Daiwa Securities.

Diversification Opportunities for Goldenstone Acquisition and Daiwa Securities

-0.43

Correlation Coefficient

Goldenstone Acquisition  Daiwa Securities

Very good diversification

The 3 months correlation between Goldenstone and Daiwa is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding Goldenstone Acquisition Limite and Daiwa Securities Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Daiwa Securities and Goldenstone Acquisition 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 Goldenstone Acquisition Limited are associated (or correlated) with Daiwa Securities. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Daiwa Securities has no effect on the direction of Goldenstone Acquisition i.e., Goldenstone Acquisition and Daiwa Securities go up and down completely randomly.

Pair Corralation between Goldenstone Acquisition and Daiwa Securities

Assuming the 90 days horizon Goldenstone Acquisition Limited is expected to generate 17.54 times more return on investment than Daiwa Securities. However, Goldenstone Acquisition is 17.54 times more volatile than Daiwa Securities Group. It trades about 0.22 of its potential returns per unit of risk. Daiwa Securities Group is currently generating about -0.27 per unit of risk. If you would invest  2.43  in Goldenstone Acquisition Limited on September 26, 2024 and sell it today you would earn a total of  0.37  from holding Goldenstone Acquisition Limited or generate 15.23% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	33.33%
Values	Daily Returns

Goldenstone Acquisition Limite  vs.  Daiwa Securities Group

Goldenstone Acquisition

Risk-Adjusted Performance

0 of 100

OK

Over the last 90 days Goldenstone Acquisition Limited has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly inconsistent basic indicators, Goldenstone Acquisition showed solid returns over the last few months and may actually be approaching a breakup point.

Daiwa Securities

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Daiwa Securities Group has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable fundamental indicators, Daiwa Securities is not utilizing all of its potentials. The latest stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Goldenstone Acquisition and Daiwa Securities

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

The idea behind Goldenstone Acquisition Limited and Daiwa Securities 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.

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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .