Correlation Between Flow Traders and Gamma Communications
Can any of the company-specific risk be diversified away by investing in both Flow Traders and Gamma Communications 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 Flow Traders and Gamma Communications into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Flow Traders NV and Gamma Communications PLC, you can compare the effects of market volatilities on Flow Traders and Gamma Communications 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 Flow Traders with a short position of Gamma Communications. Check out your portfolio center. Please also check ongoing floating volatility patterns of Flow Traders and Gamma Communications.
Diversification Opportunities for Flow Traders and Gamma Communications
-0.82 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Flow and Gamma is -0.82. Overlapping area represents the amount of risk that can be diversified away by holding Flow Traders NV and Gamma Communications PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gamma Communications PLC and Flow Traders 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 Flow Traders NV are associated (or correlated) with Gamma Communications. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gamma Communications PLC has no effect on the direction of Flow Traders i.e., Flow Traders and Gamma Communications go up and down completely randomly.
Pair Corralation between Flow Traders and Gamma Communications
Assuming the 90 days trading horizon Flow Traders is expected to generate 1.33 times less return on investment than Gamma Communications. In addition to that, Flow Traders is 1.3 times more volatile than Gamma Communications PLC. It trades about 0.02 of its total potential returns per unit of risk. Gamma Communications PLC is currently generating about 0.03 per unit of volatility. If you would invest 114,072 in Gamma Communications PLC on October 23, 2024 and sell it today you would earn a total of 18,728 from holding Gamma Communications PLC or generate 16.42% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Flow Traders NV vs. Gamma Communications PLC
Performance |
| Timeline |
| Flow Traders NV |
| Gamma Communications PLC |
Flow Traders and Gamma Communications Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Flow Traders and Gamma Communications
The main advantage of trading using opposite Flow Traders and Gamma Communications positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Flow Traders position performs unexpectedly, Gamma Communications 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 Gamma Communications will offset losses from the drop in Gamma Communications' long position.| Flow Traders vs. Automatic Data Processing | Flow Traders vs. Charter Communications Cl | Flow Traders vs. Datalogic | Flow Traders vs. Clean Power Hydrogen |
| Gamma Communications vs. AMG Advanced Metallurgical | Gamma Communications vs. Check Point Software | Gamma Communications vs. Blackrock World Mining | Gamma Communications vs. Adriatic Metals |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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