Correlation Between Gossan Resources and Expeditors International

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

Diversification Opportunities for Gossan Resources and Expeditors International

0.69
  Correlation Coefficient

Poor diversification

The 3 months correlation between Gossan and Expeditors is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Gossan Resources and Expeditors International of in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Expeditors International and Gossan Resources 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 Gossan Resources are associated (or correlated) with Expeditors International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Expeditors International has no effect on the direction of Gossan Resources i.e., Gossan Resources and Expeditors International go up and down completely randomly.

Pair Corralation between Gossan Resources and Expeditors International

Assuming the 90 days horizon Gossan Resources is expected to generate 19.15 times more return on investment than Expeditors International. However, Gossan Resources is 19.15 times more volatile than Expeditors International of. It trades about 0.03 of its potential returns per unit of risk. Expeditors International of is currently generating about -0.02 per unit of risk. If you would invest  0.75  in Gossan Resources on October 10, 2024 and sell it today you would lose (0.35) from holding Gossan Resources or give up 46.67% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthSignificant
Accuracy100.0%
ValuesDaily Returns

Gossan Resources  vs.  Expeditors International of

 Performance 
       Timeline  
Gossan Resources 

Risk-Adjusted Performance

2 of 100

 
Weak
 
Strong
Weak
Compared to the overall equity markets, risk-adjusted returns on investments in Gossan Resources are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Gossan Resources reported solid returns over the last few months and may actually be approaching a breakup point.
Expeditors International 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Expeditors International of has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, Expeditors International is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

Gossan Resources and Expeditors International Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Gossan Resources and Expeditors International

The main advantage of trading using opposite Gossan Resources and Expeditors International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gossan Resources position performs unexpectedly, Expeditors International 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 Expeditors International will offset losses from the drop in Expeditors International's long position.
The idea behind Gossan Resources and Expeditors International of 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.

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