Correlation Between Big Yellow and GOODTECH ASA

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

By analyzing existing cross correlation between Big Yellow Group and GOODTECH ASA A, you can compare the effects of market volatilities on Big Yellow and GOODTECH ASA 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 Big Yellow with a short position of GOODTECH ASA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Big Yellow and GOODTECH ASA.

Diversification Opportunities for Big Yellow and GOODTECH ASA

0.7

Correlation Coefficient

Big Yellow  GOODTECH ASA

Poor diversification

The 3 months correlation between Big and GOODTECH is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Big Yellow Group and GOODTECH ASA A in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GOODTECH ASA A and Big Yellow 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 Big Yellow Group are associated (or correlated) with GOODTECH ASA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GOODTECH ASA A has no effect on the direction of Big Yellow i.e., Big Yellow and GOODTECH ASA go up and down completely randomly.

Pair Corralation between Big Yellow and GOODTECH ASA

Assuming the 90 days horizon Big Yellow is expected to generate 1.86 times less return on investment than GOODTECH ASA. But when comparing it to its historical volatility, Big Yellow Group is 1.4 times less risky than GOODTECH ASA. It trades about 0.1 of its potential returns per unit of risk. GOODTECH ASA A is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest  69.00  in GOODTECH ASA A on April 24, 2025 and sell it today you would earn a total of  10.00  from holding GOODTECH ASA A or generate 14.49% return on investment over 90 days.

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

Big Yellow Group  vs.  GOODTECH ASA A

Big Yellow Group

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Big Yellow Group are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Big Yellow may actually be approaching a critical reversion point that can send shares even higher in August 2025.

GOODTECH ASA A

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in GOODTECH ASA A are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, GOODTECH ASA reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Big Yellow and GOODTECH ASA

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

The idea behind Big Yellow Group and GOODTECH ASA A 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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.