Correlation Between Gold Rain and I Jang

Can any of the company-specific risk be diversified away by investing in both Gold Rain and I Jang 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 Gold Rain and I Jang into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Gold Rain Enterprises and I Jang Industrial, you can compare the effects of market volatilities on Gold Rain and I Jang 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 Gold Rain with a short position of I Jang. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gold Rain and I Jang.

Diversification Opportunities for Gold Rain and I Jang

0.14

Correlation Coefficient

Gold Rain  I Jang

Average diversification

The 3 months correlation between Gold and 8342 is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding Gold Rain Enterprises and I Jang Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on I Jang Industrial and Gold Rain 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 Gold Rain Enterprises are associated (or correlated) with I Jang. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of I Jang Industrial has no effect on the direction of Gold Rain i.e., Gold Rain and I Jang go up and down completely randomly.

Pair Corralation between Gold Rain and I Jang

Assuming the 90 days trading horizon Gold Rain Enterprises is expected to generate 1.1 times more return on investment than I Jang. However, Gold Rain is 1.1 times more volatile than I Jang Industrial. It trades about 0.2 of its potential returns per unit of risk. I Jang Industrial is currently generating about -0.01 per unit of risk. If you would invest  5,060  in Gold Rain Enterprises on September 23, 2024 and sell it today you would earn a total of  350.00  from holding Gold Rain Enterprises or generate 6.92% return on investment over 90 days.

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

Gold Rain Enterprises  vs.  I Jang Industrial

Gold Rain Enterprises

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Gold Rain Enterprises are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of fairly stable basic indicators, Gold Rain is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

I Jang Industrial

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days I Jang Industrial has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, I Jang is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pair Trading with Gold Rain and I Jang

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

The idea behind Gold Rain Enterprises and I Jang Industrial 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.