Correlation Between Industrial Engineering and Grand Investment

Can any of the company-specific risk be diversified away by investing in both Industrial Engineering and Grand Investment 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 Industrial Engineering and Grand Investment into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Industrial Engineering Projects and Grand Investment Capital, you can compare the effects of market volatilities on Industrial Engineering and Grand Investment 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 Industrial Engineering with a short position of Grand Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Industrial Engineering and Grand Investment.

Diversification Opportunities for Industrial Engineering and Grand Investment

0.77

Correlation Coefficient

Industrial Engineering  Grand Investment

Poor diversification

The 3 months correlation between Industrial and Grand is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Industrial Engineering Project and Grand Investment Capital in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Grand Investment Capital and Industrial Engineering 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 Industrial Engineering Projects are associated (or correlated) with Grand Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Grand Investment Capital has no effect on the direction of Industrial Engineering i.e., Industrial Engineering and Grand Investment go up and down completely randomly.

Pair Corralation between Industrial Engineering and Grand Investment

Assuming the 90 days trading horizon Industrial Engineering Projects is expected to generate 1.64 times more return on investment than Grand Investment. However, Industrial Engineering is 1.64 times more volatile than Grand Investment Capital. It trades about 0.2 of its potential returns per unit of risk. Grand Investment Capital is currently generating about 0.2 per unit of risk. If you would invest  25.00  in Industrial Engineering Projects on December 24, 2024 and sell it today you would earn a total of  13.00  from holding Industrial Engineering Projects or generate 52.0% return on investment over 90 days.

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

Industrial Engineering Project  vs.  Grand Investment Capital

Industrial Engineering

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Industrial Engineering Projects are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile technical and fundamental indicators, Industrial Engineering reported solid returns over the last few months and may actually be approaching a breakup point.

Grand Investment Capital

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Grand Investment Capital are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile technical and fundamental indicators, Grand Investment reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Industrial Engineering and Grand Investment

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

The idea behind Industrial Engineering Projects and Grand Investment Capital 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.