Correlation Between Gamma Communications and Sixt Leasing
Can any of the company-specific risk be diversified away by investing in both Gamma Communications and Sixt Leasing 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 Sixt Leasing 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 Sixt Leasing SE, you can compare the effects of market volatilities on Gamma Communications and Sixt Leasing 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 Sixt Leasing. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gamma Communications and Sixt Leasing.
Diversification Opportunities for Gamma Communications and Sixt Leasing
-0.02 | Correlation Coefficient |
Good diversification
The 3 months correlation between Gamma and Sixt is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding Gamma Communications plc and Sixt Leasing SE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sixt Leasing SE 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 Sixt Leasing. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sixt Leasing SE has no effect on the direction of Gamma Communications i.e., Gamma Communications and Sixt Leasing go up and down completely randomly.
Pair Corralation between Gamma Communications and Sixt Leasing
Assuming the 90 days horizon Gamma Communications plc is expected to generate 0.82 times more return on investment than Sixt Leasing. However, Gamma Communications plc is 1.22 times less risky than Sixt Leasing. It trades about -0.06 of its potential returns per unit of risk. Sixt Leasing SE is currently generating about -0.16 per unit of risk. If you would invest 1,900 in Gamma Communications plc on August 29, 2024 and sell it today you would lose (40.00) from holding Gamma Communications plc or give up 2.11% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Gamma Communications plc vs. Sixt Leasing SE
Performance |
| Timeline |
| Gamma Communications plc |
| Sixt Leasing SE |
Gamma Communications and Sixt Leasing Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gamma Communications and Sixt Leasing
The main advantage of trading using opposite Gamma Communications and Sixt Leasing positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gamma Communications position performs unexpectedly, Sixt Leasing 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 Sixt Leasing will offset losses from the drop in Sixt Leasing'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 |
| Sixt Leasing vs. Apple Inc | Sixt Leasing vs. Apple Inc | Sixt Leasing vs. Apple Inc | Sixt Leasing 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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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