Correlation Between Golden Tobacco and Investment Trust

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Can any of the company-specific risk be diversified away by investing in both Golden Tobacco and Investment Trust 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 Tobacco and Investment Trust into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Golden Tobacco Limited and The Investment Trust, you can compare the effects of market volatilities on Golden Tobacco and Investment Trust 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 Tobacco with a short position of Investment Trust. Check out your portfolio center. Please also check ongoing floating volatility patterns of Golden Tobacco and Investment Trust.

Diversification Opportunities for Golden Tobacco and Investment Trust

-0.04
  Correlation Coefficient

Good diversification

The 3 months correlation between Golden and Investment is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding Golden Tobacco Limited and The Investment Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Investment Trust and Golden Tobacco 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 Tobacco Limited are associated (or correlated) with Investment Trust. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Investment Trust has no effect on the direction of Golden Tobacco i.e., Golden Tobacco and Investment Trust go up and down completely randomly.

Pair Corralation between Golden Tobacco and Investment Trust

Assuming the 90 days trading horizon Golden Tobacco Limited is expected to under-perform the Investment Trust. In addition to that, Golden Tobacco is 1.05 times more volatile than The Investment Trust. It trades about -0.02 of its total potential returns per unit of risk. The Investment Trust is currently generating about 0.0 per unit of volatility. If you would invest  20,078  in The Investment Trust on October 3, 2024 and sell it today you would lose (446.00) from holding The Investment Trust or give up 2.22% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

Golden Tobacco Limited  vs.  The Investment Trust

 Performance 
       Timeline  
Golden Tobacco 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Golden Tobacco Limited has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Golden Tobacco is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.
JavaScript chart by amCharts 3.21.15NovDecDec20253637383940414243
Investment Trust 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days The Investment Trust has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound technical and fundamental indicators, Investment Trust is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.
JavaScript chart by amCharts 3.21.15NovDecDec2025190200210220230

Golden Tobacco and Investment Trust Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Golden Tobacco and Investment Trust

The main advantage of trading using opposite Golden Tobacco and Investment Trust positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Golden Tobacco position performs unexpectedly, Investment Trust 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 Investment Trust will offset losses from the drop in Investment Trust's long position.
The idea behind Golden Tobacco Limited and The Investment Trust 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.

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