Correlation Between Golden Ventures and Impact Growth

Can any of the company-specific risk be diversified away by investing in both Golden Ventures and Impact Growth 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 Impact Growth 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 Impact Growth REIT, you can compare the effects of market volatilities on Golden Ventures and Impact Growth 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 Impact Growth. Check out your portfolio center. Please also check ongoing floating volatility patterns of Golden Ventures and Impact Growth.

Diversification Opportunities for Golden Ventures and Impact Growth

0.03

Correlation Coefficient

Golden Ventures  Impact Growth

Significant diversification

The 3 months correlation between Golden and Impact is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding Golden Ventures Leasehold and Impact Growth REIT in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Impact Growth REIT 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 Impact Growth. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Impact Growth REIT has no effect on the direction of Golden Ventures i.e., Golden Ventures and Impact Growth go up and down completely randomly.

Pair Corralation between Golden Ventures and Impact Growth

Assuming the 90 days trading horizon Golden Ventures Leasehold is expected to generate 1.57 times more return on investment than Impact Growth. However, Golden Ventures is 1.57 times more volatile than Impact Growth REIT. It trades about 0.17 of its potential returns per unit of risk. Impact Growth REIT is currently generating about -0.09 per unit of risk. If you would invest  560.00  in Golden Ventures Leasehold on August 31, 2024 and sell it today you would earn a total of  125.00  from holding Golden Ventures Leasehold or generate 22.32% return on investment over 90 days.

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

Golden Ventures Leasehold  vs.  Impact Growth REIT

Golden Ventures Leasehold

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Golden Ventures Leasehold are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Golden Ventures sustained solid returns over the last few months and may actually be approaching a breakup point.

Impact Growth REIT

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Impact Growth REIT has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest uncertain performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Pair Trading with Golden Ventures and Impact Growth

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

The idea behind Golden Ventures Leasehold and Impact Growth REIT 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.