Correlation Between Gemfields Group and SYLVANIA PLAT
Can any of the company-specific risk be diversified away by investing in both Gemfields Group and SYLVANIA PLAT 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 Gemfields Group and SYLVANIA PLAT into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Gemfields Group Limited and SYLVANIA PLAT DL, you can compare the effects of market volatilities on Gemfields Group and SYLVANIA PLAT 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 Gemfields Group with a short position of SYLVANIA PLAT. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gemfields Group and SYLVANIA PLAT.
Diversification Opportunities for Gemfields Group and SYLVANIA PLAT
0.49 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Gemfields and SYLVANIA is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding Gemfields Group Limited and SYLVANIA PLAT DL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SYLVANIA PLAT DL and Gemfields Group 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 Gemfields Group Limited are associated (or correlated) with SYLVANIA PLAT. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SYLVANIA PLAT DL has no effect on the direction of Gemfields Group i.e., Gemfields Group and SYLVANIA PLAT go up and down completely randomly.
Pair Corralation between Gemfields Group and SYLVANIA PLAT
Assuming the 90 days horizon Gemfields Group Limited is expected to under-perform the SYLVANIA PLAT. In addition to that, Gemfields Group is 1.11 times more volatile than SYLVANIA PLAT DL. It trades about -0.02 of its total potential returns per unit of risk. SYLVANIA PLAT DL is currently generating about -0.02 per unit of volatility. If you would invest 99.00 in SYLVANIA PLAT DL on September 24, 2024 and sell it today you would lose (52.00) from holding SYLVANIA PLAT DL or give up 52.53% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Gemfields Group Limited vs. SYLVANIA PLAT DL
Performance |
| Timeline |
| Gemfields Group |
| SYLVANIA PLAT DL |
Gemfields Group and SYLVANIA PLAT Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gemfields Group and SYLVANIA PLAT
The main advantage of trading using opposite Gemfields Group and SYLVANIA PLAT positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gemfields Group position performs unexpectedly, SYLVANIA PLAT 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 SYLVANIA PLAT will offset losses from the drop in SYLVANIA PLAT's long position.| Gemfields Group vs. Fresnillo plc | Gemfields Group vs. NEW PACIFIC METALS | Gemfields Group vs. THARISA NON LIST | Gemfields Group vs. SYLVANIA PLAT DL |
| SYLVANIA PLAT vs. Fresnillo plc | SYLVANIA PLAT vs. NEW PACIFIC METALS | SYLVANIA PLAT vs. THARISA NON LIST | SYLVANIA PLAT vs. Gemfields Group Limited |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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