Correlation Between Gamma Communications and BANK HANDLOWY
Can any of the company-specific risk be diversified away by investing in both Gamma Communications and BANK HANDLOWY 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 BANK HANDLOWY 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 BANK HANDLOWY, you can compare the effects of market volatilities on Gamma Communications and BANK HANDLOWY 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 BANK HANDLOWY. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gamma Communications and BANK HANDLOWY.
Diversification Opportunities for Gamma Communications and BANK HANDLOWY
0.35 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Gamma and BANK is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding Gamma Communications plc and BANK HANDLOWY in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BANK HANDLOWY 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 BANK HANDLOWY. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BANK HANDLOWY has no effect on the direction of Gamma Communications i.e., Gamma Communications and BANK HANDLOWY go up and down completely randomly.
Pair Corralation between Gamma Communications and BANK HANDLOWY
Assuming the 90 days horizon Gamma Communications plc is expected to generate 1.92 times more return on investment than BANK HANDLOWY. However, Gamma Communications is 1.92 times more volatile than BANK HANDLOWY. It trades about 0.1 of its potential returns per unit of risk. BANK HANDLOWY is currently generating about 0.15 per unit of risk. If you would invest 1,900 in Gamma Communications plc on September 12, 2024 and sell it today you would earn a total of 60.00 from holding Gamma Communications plc or generate 3.16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Gamma Communications plc vs. BANK HANDLOWY
Performance |
| Timeline |
| Gamma Communications plc |
| BANK HANDLOWY |
Gamma Communications and BANK HANDLOWY Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gamma Communications and BANK HANDLOWY
The main advantage of trading using opposite Gamma Communications and BANK HANDLOWY positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gamma Communications position performs unexpectedly, BANK HANDLOWY 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 BANK HANDLOWY will offset losses from the drop in BANK HANDLOWY's long position.| Gamma Communications vs. Superior Plus Corp | Gamma Communications vs. SIVERS SEMICONDUCTORS AB | Gamma Communications vs. Norsk Hydro ASA | Gamma Communications vs. Reliance Steel Aluminum |
| BANK HANDLOWY vs. Apple Inc | BANK HANDLOWY vs. Apple Inc | BANK HANDLOWY vs. Apple Inc | BANK HANDLOWY vs. Apple 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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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