Correlation Between Gol Intelligent and TAL Education

Can any of the company-specific risk be diversified away by investing in both Gol Intelligent and TAL Education 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 Gol Intelligent and TAL Education into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Gol Intelligent Airlines and TAL Education Group, you can compare the effects of market volatilities on Gol Intelligent and TAL Education 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 Gol Intelligent with a short position of TAL Education. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gol Intelligent and TAL Education.

Diversification Opportunities for Gol Intelligent and TAL Education

0.0

Correlation Coefficient

Gol Intelligent  TAL Education

Pay attention - limited upside

The 3 months correlation between Gol and TAL is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Gol Intelligent Airlines and TAL Education Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TAL Education Group and Gol Intelligent 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 Gol Intelligent Airlines are associated (or correlated) with TAL Education. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TAL Education Group has no effect on the direction of Gol Intelligent i.e., Gol Intelligent and TAL Education go up and down completely randomly.

Pair Corralation between Gol Intelligent and TAL Education

If you would invest  935.00  in TAL Education Group on December 26, 2024 and sell it today you would earn a total of  245.00  from holding TAL Education Group or generate 26.2% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	98.36%
Values	Daily Returns

Gol Intelligent Airlines  vs.  TAL Education Group

Gol Intelligent Airlines

Risk-Adjusted Performance

Very Weak

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

TAL Education Group

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in TAL Education Group are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively fragile basic indicators, TAL Education unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Gol Intelligent and TAL Education

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

The idea behind Gol Intelligent Airlines and TAL Education 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.