Correlation Between Guidewire Software and Amcor Plc
Can any of the company-specific risk be diversified away by investing in both Guidewire Software and Amcor 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 Guidewire Software and Amcor Plc into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Guidewire Software and Amcor plc, you can compare the effects of market volatilities on Guidewire Software and Amcor 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 Guidewire Software with a short position of Amcor Plc. Check out your portfolio center. Please also check ongoing floating volatility patterns of Guidewire Software and Amcor Plc.
Diversification Opportunities for Guidewire Software and Amcor Plc
0.52 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Guidewire and Amcor is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding Guidewire Software and Amcor plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amcor plc and Guidewire Software 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 Guidewire Software are associated (or correlated) with Amcor Plc. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Amcor plc has no effect on the direction of Guidewire Software i.e., Guidewire Software and Amcor Plc go up and down completely randomly.
Pair Corralation between Guidewire Software and Amcor Plc
Assuming the 90 days trading horizon Guidewire Software is expected to generate 1.23 times more return on investment than Amcor Plc. However, Guidewire Software is 1.23 times more volatile than Amcor plc. It trades about 0.11 of its potential returns per unit of risk. Amcor plc is currently generating about 0.01 per unit of risk. If you would invest 13,595 in Guidewire Software on October 26, 2024 and sell it today you would earn a total of 4,735 from holding Guidewire Software or generate 34.83% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Guidewire Software vs. Amcor plc
Performance |
| Timeline |
| Guidewire Software |
| Amcor plc |
Guidewire Software and Amcor Plc Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Guidewire Software and Amcor Plc
The main advantage of trading using opposite Guidewire Software and Amcor Plc positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Guidewire Software position performs unexpectedly, Amcor 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 Amcor Plc will offset losses from the drop in Amcor Plc's long position.| Guidewire Software vs. Apple Inc | Guidewire Software vs. Apple Inc | Guidewire Software vs. Apple Inc | Guidewire Software vs. Apple Inc |
| Amcor Plc vs. Keck Seng Investments | Amcor Plc vs. SLR Investment Corp | Amcor Plc vs. Guidewire Software | Amcor Plc vs. Check Point Software |
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 CEOs Directory module to screen CEOs from public companies around the world.
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