Correlation Between G8 EDUCATION and Retail Estates
Can any of the company-specific risk be diversified away by investing in both G8 EDUCATION and Retail Estates 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 G8 EDUCATION and Retail Estates into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between G8 EDUCATION and Retail Estates NV, you can compare the effects of market volatilities on G8 EDUCATION and Retail Estates 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 G8 EDUCATION with a short position of Retail Estates. Check out your portfolio center. Please also check ongoing floating volatility patterns of G8 EDUCATION and Retail Estates.
Diversification Opportunities for G8 EDUCATION and Retail Estates
-0.09 | Correlation Coefficient |
Good diversification
The 3 months correlation between 3EAG and Retail is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding G8 EDUCATION and Retail Estates NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Retail Estates NV and G8 EDUCATION 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 G8 EDUCATION are associated (or correlated) with Retail Estates. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Retail Estates NV has no effect on the direction of G8 EDUCATION i.e., G8 EDUCATION and Retail Estates go up and down completely randomly.
Pair Corralation between G8 EDUCATION and Retail Estates
Assuming the 90 days trading horizon G8 EDUCATION is expected to generate 1.52 times more return on investment than Retail Estates. However, G8 EDUCATION is 1.52 times more volatile than Retail Estates NV. It trades about 0.06 of its potential returns per unit of risk. Retail Estates NV is currently generating about -0.02 per unit of risk. If you would invest 71.00 in G8 EDUCATION on September 3, 2024 and sell it today you would earn a total of 11.00 from holding G8 EDUCATION or generate 15.49% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
G8 EDUCATION vs. Retail Estates NV
Performance |
| Timeline |
| G8 EDUCATION |
| Retail Estates NV |
G8 EDUCATION and Retail Estates Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with G8 EDUCATION and Retail Estates
The main advantage of trading using opposite G8 EDUCATION and Retail Estates positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if G8 EDUCATION position performs unexpectedly, Retail Estates 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 Retail Estates will offset losses from the drop in Retail Estates' long position.| G8 EDUCATION vs. Computershare Limited | G8 EDUCATION vs. INTERSHOP Communications Aktiengesellschaft | G8 EDUCATION vs. ATRESMEDIA | G8 EDUCATION vs. SCANSOURCE |
| Retail Estates vs. Axway Software SA | Retail Estates vs. ATOSS SOFTWARE | Retail Estates vs. G8 EDUCATION | Retail Estates vs. American Public Education |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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