Correlation Between Golden Ventures and Mitsib Leasing

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

Diversification Opportunities for Golden Ventures and Mitsib Leasing

0.22

Correlation Coefficient

Golden Ventures  Mitsib Leasing

Modest diversification

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

Pair Corralation between Golden Ventures and Mitsib Leasing

Assuming the 90 days trading horizon Golden Ventures Leasehold is expected to generate 1.15 times more return on investment than Mitsib Leasing. However, Golden Ventures is 1.15 times more volatile than Mitsib Leasing Public. It trades about -0.05 of its potential returns per unit of risk. Mitsib Leasing Public is currently generating about -0.14 per unit of risk. If you would invest  674.00  in Golden Ventures Leasehold on September 24, 2024 and sell it today you would lose (34.00) from holding Golden Ventures Leasehold or give up 5.04% of portfolio value over 90 days.

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

Golden Ventures Leasehold  vs.  Mitsib Leasing Public

Golden Ventures Leasehold

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Golden Ventures Leasehold has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Golden Ventures is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Mitsib Leasing Public

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Mitsib Leasing Public has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak 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 Mitsib Leasing

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

The idea behind Golden Ventures Leasehold and Mitsib Leasing Public 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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.