Correlation Between G8 EDUCATION and DAIDO METAL

Can any of the company-specific risk be diversified away by investing in both G8 EDUCATION and DAIDO METAL 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 G8 EDUCATION and DAIDO METAL into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between G8 EDUCATION and DAIDO METAL TD, you can compare the effects of market volatilities on G8 EDUCATION and DAIDO METAL 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 G8 EDUCATION with a short position of DAIDO METAL. Check out your portfolio center. Please also check ongoing floating volatility patterns of G8 EDUCATION and DAIDO METAL.

Diversification Opportunities for G8 EDUCATION and DAIDO METAL

-0.51

Correlation Coefficient

G8 EDUCATION  DAIDO METAL

Excellent diversification

The 3 months correlation between 3EAG and DAIDO is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding G8 EDUCATION and DAIDO METAL TD in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DAIDO METAL TD and G8 EDUCATION 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 G8 EDUCATION are associated (or correlated) with DAIDO METAL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DAIDO METAL TD has no effect on the direction of G8 EDUCATION i.e., G8 EDUCATION and DAIDO METAL go up and down completely randomly.

Pair Corralation between G8 EDUCATION and DAIDO METAL

Assuming the 90 days trading horizon G8 EDUCATION is expected to under-perform the DAIDO METAL. But the stock apears to be less risky and, when comparing its historical volatility, G8 EDUCATION is 1.51 times less risky than DAIDO METAL. The stock trades about -0.25 of its potential returns per unit of risk. The DAIDO METAL TD is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest  276.00  in DAIDO METAL TD on April 22, 2025 and sell it today you would earn a total of  90.00  from holding DAIDO METAL TD or generate 32.61% return on investment over 90 days.

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

G8 EDUCATION  vs.  DAIDO METAL TD

G8 EDUCATION

Risk-Adjusted Performance

Very Weak

Over the last 90 days G8 EDUCATION has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's technical and fundamental indicators remain rather sound which may send shares a bit higher in August 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

DAIDO METAL TD

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in DAIDO METAL TD are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite nearly uncertain basic indicators, DAIDO METAL reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with G8 EDUCATION and DAIDO METAL

The main advantage of trading using opposite G8 EDUCATION and DAIDO METAL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if G8 EDUCATION position performs unexpectedly, DAIDO METAL 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 DAIDO METAL will offset losses from the drop in DAIDO METAL's long position.

The idea behind G8 EDUCATION and DAIDO METAL TD 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.