Correlation Between Goff Corp and Amaero International

Can any of the company-specific risk be diversified away by investing in both Goff Corp and Amaero 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 Goff Corp and Amaero International into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Goff Corp and Amaero International, you can compare the effects of market volatilities on Goff Corp and Amaero 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 Goff Corp with a short position of Amaero International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Goff Corp and Amaero International.

Diversification Opportunities for Goff Corp and Amaero International

0.03

Correlation Coefficient

Goff Corp  Amaero International

Significant diversification

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

Pair Corralation between Goff Corp and Amaero International

Given the investment horizon of 90 days Goff Corp is expected to generate 6.78 times more return on investment than Amaero International. However, Goff Corp is 6.78 times more volatile than Amaero International. It trades about 0.06 of its potential returns per unit of risk. Amaero International is currently generating about 0.03 per unit of risk. If you would invest  5.12  in Goff Corp on September 3, 2024 and sell it today you would lose (4.25) from holding Goff Corp or give up 83.01% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	99.8%
Values	Daily Returns

Goff Corp  vs.  Amaero International

Goff Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Goff Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable technical and fundamental indicators, Goff Corp is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Amaero International

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Amaero International has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Amaero International is not utilizing all of its potentials. The latest stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Goff Corp and Amaero International

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

The idea behind Goff Corp and Amaero International 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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.