Correlation Between Gamma Communications and Globe Trade
Can any of the company-specific risk be diversified away by investing in both Gamma Communications and Globe Trade 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 Globe Trade 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 Globe Trade Centre, you can compare the effects of market volatilities on Gamma Communications and Globe Trade 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 Globe Trade. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gamma Communications and Globe Trade.
Diversification Opportunities for Gamma Communications and Globe Trade
0.27 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Gamma and Globe is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding Gamma Communications plc and Globe Trade Centre in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Globe Trade Centre 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 Globe Trade. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Globe Trade Centre has no effect on the direction of Gamma Communications i.e., Gamma Communications and Globe Trade go up and down completely randomly.
Pair Corralation between Gamma Communications and Globe Trade
Assuming the 90 days horizon Gamma Communications plc is expected to generate 0.82 times more return on investment than Globe Trade. However, Gamma Communications plc is 1.22 times less risky than Globe Trade. It trades about 0.05 of its potential returns per unit of risk. Globe Trade Centre is currently generating about 0.01 per unit of risk. If you would invest 1,694 in Gamma Communications plc on September 5, 2024 and sell it today you would earn a total of 206.00 from holding Gamma Communications plc or generate 12.16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 99.22% |
| Values | Daily Returns |
Gamma Communications plc vs. Globe Trade Centre
Performance |
| Timeline |
| Gamma Communications plc |
| Globe Trade Centre |
Gamma Communications and Globe Trade Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gamma Communications and Globe Trade
The main advantage of trading using opposite Gamma Communications and Globe Trade positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gamma Communications position performs unexpectedly, Globe Trade 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 Globe Trade will offset losses from the drop in Globe Trade's long position.| Gamma Communications vs. Virtus Investment Partners | Gamma Communications vs. CDL INVESTMENT | Gamma Communications vs. Salesforce | Gamma Communications vs. Strategic Investments AS |
| Globe Trade vs. TOTAL GABON | Globe Trade vs. Walgreens Boots Alliance | Globe Trade vs. Peak Resources 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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