Correlation Between Golden Ventures and Land

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

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

Diversification Opportunities for Golden Ventures and Land

0.41

Correlation Coefficient

Golden Ventures  Land

Very weak diversification

The 3 months correlation between Golden and Land is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding Golden Ventures Leasehold and Land and Houses in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Land and Houses and Golden Ventures 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 Golden Ventures Leasehold are associated (or correlated) with Land. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Land and Houses has no effect on the direction of Golden Ventures i.e., Golden Ventures and Land go up and down completely randomly.

Pair Corralation between Golden Ventures and Land

Assuming the 90 days trading horizon Golden Ventures is expected to generate 25.4 times less return on investment than Land. But when comparing it to its historical volatility, Golden Ventures Leasehold is 57.5 times less risky than Land. It trades about 0.16 of its potential returns per unit of risk. Land and Houses is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest  570.00  in Land and Houses on September 5, 2024 and sell it today you would lose (570.00) from holding Land and Houses or give up 100.0% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	99.19%
Values	Daily Returns

Golden Ventures Leasehold  vs.  Land and Houses

Golden Ventures Leasehold

Risk-Adjusted Performance

10 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Golden Ventures Leasehold are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Golden Ventures sustained solid returns over the last few months and may actually be approaching a breakup point.

Land and Houses

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Land and Houses 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 Golden Ventures and Land

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

The idea behind Golden Ventures Leasehold and Land and Houses 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.