Correlation Between TRAINLINE PLC and GB Group
Can any of the company-specific risk be diversified away by investing in both TRAINLINE PLC and GB Group 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 TRAINLINE PLC and GB Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between TRAINLINE PLC LS and GB Group plc, you can compare the effects of market volatilities on TRAINLINE PLC and GB Group 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 TRAINLINE PLC with a short position of GB Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of TRAINLINE PLC and GB Group.
Diversification Opportunities for TRAINLINE PLC and GB Group
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between TRAINLINE and 0GB is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding TRAINLINE PLC LS and GB Group plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GB Group plc and TRAINLINE PLC 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 TRAINLINE PLC LS are associated (or correlated) with GB Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GB Group plc has no effect on the direction of TRAINLINE PLC i.e., TRAINLINE PLC and GB Group go up and down completely randomly.
Pair Corralation between TRAINLINE PLC and GB Group
Assuming the 90 days trading horizon TRAINLINE PLC LS is expected to under-perform the GB Group. In addition to that, TRAINLINE PLC is 1.91 times more volatile than GB Group plc. It trades about -0.27 of its total potential returns per unit of risk. GB Group plc is currently generating about -0.06 per unit of volatility. If you would invest 408.00 in GB Group plc on October 23, 2024 and sell it today you would lose (8.00) from holding GB Group plc or give up 1.96% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
TRAINLINE PLC LS vs. GB Group plc
Performance |
| Timeline |
| TRAINLINE PLC LS |
| GB Group plc |
TRAINLINE PLC and GB Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with TRAINLINE PLC and GB Group
The main advantage of trading using opposite TRAINLINE PLC and GB Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if TRAINLINE PLC position performs unexpectedly, GB Group 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 GB Group will offset losses from the drop in GB Group's long position.| TRAINLINE PLC vs. GREENX METALS LTD | TRAINLINE PLC vs. De Grey Mining | TRAINLINE PLC vs. CNVISION MEDIA | TRAINLINE PLC vs. Grupo Media Capital |
| GB Group vs. SIDETRADE EO 1 | GB Group vs. Scandinavian Tobacco Group | GB Group vs. Fast Retailing Co | GB Group vs. CVW CLEANTECH INC |
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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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