Correlation Between Goliath Film and Sanwire

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

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

Diversification Opportunities for Goliath Film and Sanwire

0.54

Correlation Coefficient

Goliath Film  Sanwire

Very weak diversification

The 3 months correlation between Goliath and Sanwire is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding Goliath Film and and Sanwire in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sanwire and Goliath Film 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 Goliath Film and are associated (or correlated) with Sanwire. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sanwire has no effect on the direction of Goliath Film i.e., Goliath Film and Sanwire go up and down completely randomly.

Pair Corralation between Goliath Film and Sanwire

Given the investment horizon of 90 days Goliath Film is expected to generate 57.88 times less return on investment than Sanwire. But when comparing it to its historical volatility, Goliath Film and is 1.89 times less risky than Sanwire. It trades about 0.0 of its potential returns per unit of risk. Sanwire is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest  0.03  in Sanwire on September 22, 2024 and sell it today you would earn a total of  0.01  from holding Sanwire or generate 33.33% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	99.22%
Values	Daily Returns

Goliath Film and  vs.  Sanwire

Goliath Film

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Goliath Film and has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's primary indicators remain fairly strong which may send shares a bit higher in January 2025. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.

Sanwire

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Sanwire are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Even with relatively abnormal basic indicators, Sanwire reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Goliath Film and Sanwire

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

The idea behind Goliath Film and and Sanwire 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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.