Correlation Between Qurate Retail and Gfinity PLC
Can any of the company-specific risk be diversified away by investing in both Qurate Retail and Gfinity PLC 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 Qurate Retail and Gfinity PLC into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Qurate Retail Series and Gfinity PLC, you can compare the effects of market volatilities on Qurate Retail and Gfinity PLC 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 Qurate Retail with a short position of Gfinity PLC. Check out your portfolio center. Please also check ongoing floating volatility patterns of Qurate Retail and Gfinity PLC.
Diversification Opportunities for Qurate Retail and Gfinity PLC
-0.67 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Qurate and Gfinity is -0.67. Overlapping area represents the amount of risk that can be diversified away by holding Qurate Retail Series and Gfinity PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gfinity PLC and Qurate Retail 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 Qurate Retail Series are associated (or correlated) with Gfinity PLC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gfinity PLC has no effect on the direction of Qurate Retail i.e., Qurate Retail and Gfinity PLC go up and down completely randomly.
Pair Corralation between Qurate Retail and Gfinity PLC
Assuming the 90 days trading horizon Qurate Retail Series is expected to under-perform the Gfinity PLC. But the stock apears to be less risky and, when comparing its historical volatility, Qurate Retail Series is 4.24 times less risky than Gfinity PLC. The stock trades about -0.15 of its potential returns per unit of risk. The Gfinity PLC is currently generating about 0.32 of returns per unit of risk over similar time horizon. If you would invest 2.25 in Gfinity PLC on September 23, 2024 and sell it today you would earn a total of 3.50 from holding Gfinity PLC or generate 155.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Qurate Retail Series vs. Gfinity PLC
Performance |
| Timeline |
| Qurate Retail Series |
| Gfinity PLC |
Qurate Retail and Gfinity PLC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Qurate Retail and Gfinity PLC
The main advantage of trading using opposite Qurate Retail and Gfinity PLC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Qurate Retail position performs unexpectedly, Gfinity PLC 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 Gfinity PLC will offset losses from the drop in Gfinity PLC's long position.| Qurate Retail vs. JD Sports Fashion | Qurate Retail vs. Impax Environmental Markets | Qurate Retail vs. Seche Environnement SA | Qurate Retail vs. Ironveld Plc |
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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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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