Correlation Between Global Develpmts and 9F

Can any of the company-specific risk be diversified away by investing in both Global Develpmts and 9F 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 Global Develpmts and 9F into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Global Develpmts and 9F Inc, you can compare the effects of market volatilities on Global Develpmts and 9F 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 Global Develpmts with a short position of 9F. Check out your portfolio center. Please also check ongoing floating volatility patterns of Global Develpmts and 9F.

Diversification Opportunities for Global Develpmts and 9F

0.22

Correlation Coefficient

Global Develpmts  9F

Modest diversification

The 3 months correlation between Global and 9F is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding Global Develpmts and 9F Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on 9F Inc and Global Develpmts 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 Global Develpmts are associated (or correlated) with 9F. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of 9F Inc has no effect on the direction of Global Develpmts i.e., Global Develpmts and 9F go up and down completely randomly.

Pair Corralation between Global Develpmts and 9F

Given the investment horizon of 90 days Global Develpmts is expected to generate 3.85 times more return on investment than 9F. However, Global Develpmts is 3.85 times more volatile than 9F Inc. It trades about 0.02 of its potential returns per unit of risk. 9F Inc is currently generating about -0.02 per unit of risk. If you would invest  1.21  in Global Develpmts on December 26, 2024 and sell it today you would lose (0.26) from holding Global Develpmts or give up 21.49% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Global Develpmts  vs.  9F Inc

Global Develpmts

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Global Develpmts are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of very conflicting basic indicators, Global Develpmts displayed solid returns over the last few months and may actually be approaching a breakup point.

9F Inc

Risk-Adjusted Performance

Very Weak

Over the last 90 days 9F Inc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable technical and fundamental indicators, 9F is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Global Develpmts and 9F

The main advantage of trading using opposite Global Develpmts and 9F positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Global Develpmts position performs unexpectedly, 9F 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 9F will offset losses from the drop in 9F's long position.

The idea behind Global Develpmts and 9F Inc 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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.