Correlation Between Gamma Communications and MEBUKI FINANCIAL
Can any of the company-specific risk be diversified away by investing in both Gamma Communications and MEBUKI FINANCIAL 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 Gamma Communications and MEBUKI FINANCIAL into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Gamma Communications plc and MEBUKI FINANCIAL GROUP, you can compare the effects of market volatilities on Gamma Communications and MEBUKI FINANCIAL 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 Gamma Communications with a short position of MEBUKI FINANCIAL. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gamma Communications and MEBUKI FINANCIAL.
Diversification Opportunities for Gamma Communications and MEBUKI FINANCIAL
-0.12 | Correlation Coefficient |
Good diversification
The 3 months correlation between Gamma and MEBUKI is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding Gamma Communications plc and MEBUKI FINANCIAL GROUP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MEBUKI FINANCIAL and Gamma Communications 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 Gamma Communications plc are associated (or correlated) with MEBUKI FINANCIAL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MEBUKI FINANCIAL has no effect on the direction of Gamma Communications i.e., Gamma Communications and MEBUKI FINANCIAL go up and down completely randomly.
Pair Corralation between Gamma Communications and MEBUKI FINANCIAL
Assuming the 90 days horizon Gamma Communications is expected to generate 1.23 times less return on investment than MEBUKI FINANCIAL. In addition to that, Gamma Communications is 1.11 times more volatile than MEBUKI FINANCIAL GROUP. It trades about 0.06 of its total potential returns per unit of risk. MEBUKI FINANCIAL GROUP is currently generating about 0.08 per unit of volatility. If you would invest 202.00 in MEBUKI FINANCIAL GROUP on August 29, 2024 and sell it today you would earn a total of 194.00 from holding MEBUKI FINANCIAL GROUP or generate 96.04% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Gamma Communications plc vs. MEBUKI FINANCIAL GROUP
Performance |
| Timeline |
| Gamma Communications plc |
| MEBUKI FINANCIAL |
Gamma Communications and MEBUKI FINANCIAL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gamma Communications and MEBUKI FINANCIAL
The main advantage of trading using opposite Gamma Communications and MEBUKI FINANCIAL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gamma Communications position performs unexpectedly, MEBUKI FINANCIAL 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 MEBUKI FINANCIAL will offset losses from the drop in MEBUKI FINANCIAL's long position.| Gamma Communications vs. DATANG INTL POW | Gamma Communications vs. China Datang | Gamma Communications vs. NTT DATA | Gamma Communications vs. NXP Semiconductors NV |
| MEBUKI FINANCIAL vs. Silicon Motion Technology | MEBUKI FINANCIAL vs. Virtus Investment Partners | MEBUKI FINANCIAL vs. Sanyo Chemical Industries | MEBUKI FINANCIAL vs. China BlueChemical |
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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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