Correlation Between Gamma Communications and Carlsberg
Can any of the company-specific risk be diversified away by investing in both Gamma Communications and Carlsberg 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 Carlsberg 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 Carlsberg AS, you can compare the effects of market volatilities on Gamma Communications and Carlsberg 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 Carlsberg. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gamma Communications and Carlsberg.
Diversification Opportunities for Gamma Communications and Carlsberg
0.22 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Gamma and Carlsberg is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding Gamma Communications plc and Carlsberg AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Carlsberg AS 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 Carlsberg. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Carlsberg AS has no effect on the direction of Gamma Communications i.e., Gamma Communications and Carlsberg go up and down completely randomly.
Pair Corralation between Gamma Communications and Carlsberg
Assuming the 90 days horizon Gamma Communications plc is expected to generate 1.18 times more return on investment than Carlsberg. However, Gamma Communications is 1.18 times more volatile than Carlsberg AS. It trades about 0.05 of its potential returns per unit of risk. Carlsberg AS is currently generating about 0.04 per unit of risk. If you would invest 1,135 in Gamma Communications plc on August 29, 2024 and sell it today you would earn a total of 725.00 from holding Gamma Communications plc or generate 63.88% 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. Carlsberg AS
Performance |
| Timeline |
| Gamma Communications plc |
| Carlsberg AS |
Gamma Communications and Carlsberg Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gamma Communications and Carlsberg
The main advantage of trading using opposite Gamma Communications and Carlsberg positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gamma Communications position performs unexpectedly, Carlsberg 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 Carlsberg will offset losses from the drop in Carlsberg's long position.| Gamma Communications vs. QINGCI GAMES INC | Gamma Communications vs. TROPHY GAMES DEV | Gamma Communications vs. GigaMedia | Gamma Communications vs. Perseus Mining Limited |
| Carlsberg vs. Tyson Foods | Carlsberg vs. AUSNUTRIA DAIRY | Carlsberg vs. Choice Hotels International | Carlsberg vs. DALATA HOTEL |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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