Correlation Between Gamma Communications and Cross Country
Can any of the company-specific risk be diversified away by investing in both Gamma Communications and Cross Country 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 Cross Country 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 Cross Country Healthcare, you can compare the effects of market volatilities on Gamma Communications and Cross Country 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 Cross Country. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gamma Communications and Cross Country.
Diversification Opportunities for Gamma Communications and Cross Country
0.43 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Gamma and Cross is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding Gamma Communications plc and Cross Country Healthcare in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cross Country Healthcare 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 Cross Country. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cross Country Healthcare has no effect on the direction of Gamma Communications i.e., Gamma Communications and Cross Country go up and down completely randomly.
Pair Corralation between Gamma Communications and Cross Country
Assuming the 90 days horizon Gamma Communications plc is expected to generate 0.49 times more return on investment than Cross Country. However, Gamma Communications plc is 2.05 times less risky than Cross Country. It trades about 0.09 of its potential returns per unit of risk. Cross Country Healthcare is currently generating about 0.01 per unit of risk. If you would invest 1,198 in Gamma Communications plc on September 14, 2024 and sell it today you would earn a total of 752.00 from holding Gamma Communications plc or generate 62.77% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 99.6% |
| Values | Daily Returns |
Gamma Communications plc vs. Cross Country Healthcare
Performance |
| Timeline |
| Gamma Communications plc |
| Cross Country Healthcare |
Gamma Communications and Cross Country Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gamma Communications and Cross Country
The main advantage of trading using opposite Gamma Communications and Cross Country positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gamma Communications position performs unexpectedly, Cross Country 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 Cross Country will offset losses from the drop in Cross Country'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 |
| Cross Country vs. Robert Half International | Cross Country vs. Insperity | Cross Country vs. ASGN Incorporated | Cross Country vs. ManpowerGroup |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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