Correlation Between KAUFMAN ET and Gamma Communications
Can any of the company-specific risk be diversified away by investing in both KAUFMAN ET 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 KAUFMAN ET and Gamma Communications into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between KAUFMAN ET BROAD and Gamma Communications plc, you can compare the effects of market volatilities on KAUFMAN ET 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 KAUFMAN ET with a short position of Gamma Communications. Check out your portfolio center. Please also check ongoing floating volatility patterns of KAUFMAN ET and Gamma Communications.
Diversification Opportunities for KAUFMAN ET and Gamma Communications
0.08 | Correlation Coefficient |
Significant diversification
The 3 months correlation between KAUFMAN and Gamma is 0.08. Overlapping area represents the amount of risk that can be diversified away by holding KAUFMAN ET BROAD 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 KAUFMAN ET 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 KAUFMAN ET BROAD 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 KAUFMAN ET i.e., KAUFMAN ET and Gamma Communications go up and down completely randomly.
Pair Corralation between KAUFMAN ET and Gamma Communications
Assuming the 90 days trading horizon KAUFMAN ET BROAD is expected to under-perform the Gamma Communications. But the stock apears to be less risky and, when comparing its historical volatility, KAUFMAN ET BROAD is 1.09 times less risky than Gamma Communications. The stock trades about -0.27 of its potential returns per unit of risk. The Gamma Communications plc is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest 1,860 in Gamma Communications plc on September 2, 2024 and sell it today you would earn a total of 90.00 from holding Gamma Communications plc or generate 4.84% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
KAUFMAN ET BROAD vs. Gamma Communications plc
Performance |
| Timeline |
| KAUFMAN ET BROAD |
| Gamma Communications plc |
KAUFMAN ET and Gamma Communications Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KAUFMAN ET and Gamma Communications
The main advantage of trading using opposite KAUFMAN ET and Gamma Communications positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KAUFMAN ET 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.| KAUFMAN ET vs. SIVERS SEMICONDUCTORS AB | KAUFMAN ET vs. Darden Restaurants | KAUFMAN ET vs. Reliance Steel Aluminum | KAUFMAN ET vs. Q2M Managementberatung AG |
| Gamma Communications vs. BJs Wholesale Club | Gamma Communications vs. ARDAGH METAL PACDL 0001 | Gamma Communications vs. Lendlease Group | Gamma Communications vs. PARKEN Sport Entertainment |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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