Correlation Between Grape King and Swancor Holding

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

By analyzing existing cross correlation between Grape King Bio and Swancor Holding Co, you can compare the effects of market volatilities on Grape King and Swancor Holding 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 Grape King with a short position of Swancor Holding. Check out your portfolio center. Please also check ongoing floating volatility patterns of Grape King and Swancor Holding.

Diversification Opportunities for Grape King and Swancor Holding

0.58

Correlation Coefficient

Grape King  Swancor Holding

Very weak diversification

The 3 months correlation between Grape and Swancor is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding Grape King Bio and Swancor Holding Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Swancor Holding and Grape King 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 Grape King Bio are associated (or correlated) with Swancor Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Swancor Holding has no effect on the direction of Grape King i.e., Grape King and Swancor Holding go up and down completely randomly.

Pair Corralation between Grape King and Swancor Holding

Assuming the 90 days trading horizon Grape King Bio is expected to generate 0.32 times more return on investment than Swancor Holding. However, Grape King Bio is 3.08 times less risky than Swancor Holding. It trades about 0.14 of its potential returns per unit of risk. Swancor Holding Co is currently generating about -0.01 per unit of risk. If you would invest  15,400  in Grape King Bio on February 22, 2024 and sell it today you would earn a total of  400.00  from holding Grape King Bio or generate 2.6% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	95.24%
Values	Daily Returns

Grape King Bio  vs.  Swancor Holding Co

Grape King Bio

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Grape King Bio are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of fairly stable basic indicators, Grape King is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Swancor Holding

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Swancor Holding Co are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, Swancor Holding showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Grape King and Swancor Holding

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

The idea behind Grape King Bio and Swancor Holding Co 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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.