Correlation Between PT Global and Sporttotal
Can any of the company-specific risk be diversified away by investing in both PT Global and Sporttotal 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 PT Global and Sporttotal into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PT Global Mediacom and Sporttotal AG, you can compare the effects of market volatilities on PT Global and Sporttotal 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 PT Global with a short position of Sporttotal. Check out your portfolio center. Please also check ongoing floating volatility patterns of PT Global and Sporttotal.
Diversification Opportunities for PT Global and Sporttotal
0.61 | Correlation Coefficient |
Poor diversification
The 3 months correlation between 06L and Sporttotal is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding PT Global Mediacom and Sporttotal AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sporttotal AG and PT Global 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 PT Global Mediacom are associated (or correlated) with Sporttotal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sporttotal AG has no effect on the direction of PT Global i.e., PT Global and Sporttotal go up and down completely randomly.
Pair Corralation between PT Global and Sporttotal
Assuming the 90 days trading horizon PT Global Mediacom is expected to generate 3.81 times more return on investment than Sporttotal. However, PT Global is 3.81 times more volatile than Sporttotal AG. It trades about 0.04 of its potential returns per unit of risk. Sporttotal AG is currently generating about -0.05 per unit of risk. If you would invest 0.95 in PT Global Mediacom on August 28, 2024 and sell it today you would lose (0.20) from holding PT Global Mediacom or give up 21.05% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.53% |
| Values | Daily Returns |
PT Global Mediacom vs. Sporttotal AG
Performance |
| Timeline |
| PT Global Mediacom |
| Sporttotal AG |
PT Global and Sporttotal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PT Global and Sporttotal
The main advantage of trading using opposite PT Global and Sporttotal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PT Global position performs unexpectedly, Sporttotal 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 Sporttotal will offset losses from the drop in Sporttotal's long position.| PT Global vs. LGI Homes | PT Global vs. INVITATION HOMES DL | PT Global vs. American Homes 4 | PT Global vs. The Home Depot |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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