Correlation Between Country Group and Everland Public

Can any of the company-specific risk be diversified away by investing in both Country Group and Everland Public 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 Country Group and Everland Public into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Country Group Development and Everland Public, you can compare the effects of market volatilities on Country Group and Everland Public 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 Country Group with a short position of Everland Public. Check out your portfolio center. Please also check ongoing floating volatility patterns of Country Group and Everland Public.

Diversification Opportunities for Country Group and Everland Public

0.17

Correlation Coefficient

Country Group  Everland Public

Average diversification

The 3 months correlation between Country and Everland is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding Country Group Development and Everland Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Everland Public and Country Group 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 Country Group Development are associated (or correlated) with Everland Public. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Everland Public has no effect on the direction of Country Group i.e., Country Group and Everland Public go up and down completely randomly.

Pair Corralation between Country Group and Everland Public

Assuming the 90 days trading horizon Country Group Development is expected to generate 0.46 times more return on investment than Everland Public. However, Country Group Development is 2.18 times less risky than Everland Public. It trades about -0.01 of its potential returns per unit of risk. Everland Public is currently generating about -0.05 per unit of risk. If you would invest  34.00  in Country Group Development on September 14, 2024 and sell it today you would lose (1.00) from holding Country Group Development or give up 2.94% of portfolio value over 90 days.

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

Country Group Development  vs.  Everland Public

Country Group Development

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Country Group Development has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent fundamental indicators, Country Group is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

Everland Public

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Everland Public has generated negative risk-adjusted returns adding no value to investors with long positions. Despite conflicting performance in the last few months, the Stock's forward-looking signals remain quite persistent which may send shares a bit higher in January 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Pair Trading with Country Group and Everland Public

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

The idea behind Country Group Development and Everland 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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.