Correlation Between Golden Ventures and CENTRAL RETAIL

Can any of the company-specific risk be diversified away by investing in both Golden Ventures and CENTRAL RETAIL 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 Ventures and CENTRAL RETAIL into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Golden Ventures Leasehold and CENTRAL RETAIL P, you can compare the effects of market volatilities on Golden Ventures and CENTRAL RETAIL 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 Ventures with a short position of CENTRAL RETAIL. Check out your portfolio center. Please also check ongoing floating volatility patterns of Golden Ventures and CENTRAL RETAIL.

Diversification Opportunities for Golden Ventures and CENTRAL RETAIL

-0.22

Correlation Coefficient

Golden Ventures  CENTRAL RETAIL

Very good diversification

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

Pair Corralation between Golden Ventures and CENTRAL RETAIL

Assuming the 90 days trading horizon Golden Ventures Leasehold is expected to generate 0.23 times more return on investment than CENTRAL RETAIL. However, Golden Ventures Leasehold is 4.35 times less risky than CENTRAL RETAIL. It trades about 0.11 of its potential returns per unit of risk. CENTRAL RETAIL P is currently generating about -0.13 per unit of risk. If you would invest  630.00  in Golden Ventures Leasehold on December 25, 2024 and sell it today you would earn a total of  40.00  from holding Golden Ventures Leasehold or generate 6.35% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Golden Ventures Leasehold  vs.  CENTRAL RETAIL P

Golden Ventures Leasehold

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Golden Ventures Leasehold are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Golden Ventures may actually be approaching a critical reversion point that can send shares even higher in April 2025.

CENTRAL RETAIL P

Risk-Adjusted Performance

Very Weak

Over the last 90 days CENTRAL RETAIL P has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's fundamental drivers remain somewhat strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with Golden Ventures and CENTRAL RETAIL

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

The idea behind Golden Ventures Leasehold and CENTRAL RETAIL P 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 Equity Valuation module to check real value of public entities based on technical and fundamental data.