Correlation Between Goff Corp and Australis Capital

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

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

Diversification Opportunities for Goff Corp and Australis Capital

0.0

Correlation Coefficient

Goff Corp  Australis Capital

Pay attention - limited upside

The 3 months correlation between Goff and Australis is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Goff Corp and Australis Capital in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Australis Capital 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 Australis Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Australis Capital has no effect on the direction of Goff Corp i.e., Goff Corp and Australis Capital go up and down completely randomly.

Pair Corralation between Goff Corp and Australis Capital

If you would invest  0.99  in Goff Corp on October 1, 2024 and sell it today you would earn a total of  1.01  from holding Goff Corp or generate 102.02% return on investment over 90 days.

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

Goff Corp  vs.  Australis Capital

Goff Corp

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Goff Corp are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unfluctuating technical and fundamental indicators, Goff Corp unveiled solid returns over the last few months and may actually be approaching a breakup point.

Australis Capital

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Australis Capital are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite nearly sluggish basic indicators, Australis Capital reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Goff Corp and Australis Capital

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

The idea behind Goff Corp and Australis 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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.