Correlation Between Tadir Gan and GODM Investments

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

By analyzing existing cross correlation between Tadir Gan 1993 and GODM Investments, you can compare the effects of market volatilities on Tadir Gan and GODM Investments 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 Tadir Gan with a short position of GODM Investments. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tadir Gan and GODM Investments.

Diversification Opportunities for Tadir Gan and GODM Investments

-0.12

Correlation Coefficient

Tadir Gan  GODM Investments

Good diversification

The 3 months correlation between Tadir and GODM is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding Tadir Gan 1993 and GODM Investments in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GODM Investments and Tadir Gan 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 Tadir Gan 1993 are associated (or correlated) with GODM Investments. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GODM Investments has no effect on the direction of Tadir Gan i.e., Tadir Gan and GODM Investments go up and down completely randomly.

Pair Corralation between Tadir Gan and GODM Investments

Assuming the 90 days trading horizon Tadir Gan 1993 is expected to under-perform the GODM Investments. But the stock apears to be less risky and, when comparing its historical volatility, Tadir Gan 1993 is 1.3 times less risky than GODM Investments. The stock trades about -0.02 of its potential returns per unit of risk. The GODM Investments is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest  2,600  in GODM Investments on September 28, 2024 and sell it today you would earn a total of  500.00  from holding GODM Investments or generate 19.23% return on investment over 90 days.

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

Tadir Gan 1993  vs.  GODM Investments

Tadir Gan 1993

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Tadir Gan 1993 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Tadir Gan is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

GODM Investments

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in GODM Investments are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, GODM Investments sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Tadir Gan and GODM Investments

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

The idea behind Tadir Gan 1993 and GODM Investments 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.

Check out your portfolio center.

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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.