Correlation Between Broadwind and Gestamp Automocin
Can any of the company-specific risk be diversified away by investing in both Broadwind and Gestamp Automocin 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 Broadwind and Gestamp Automocin into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Broadwind and Gestamp Automocin SA, you can compare the effects of market volatilities on Broadwind and Gestamp Automocin 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 Broadwind with a short position of Gestamp Automocin. Check out your portfolio center. Please also check ongoing floating volatility patterns of Broadwind and Gestamp Automocin.
Diversification Opportunities for Broadwind and Gestamp Automocin
0.32 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Broadwind and Gestamp is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding Broadwind and Gestamp Automocin SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gestamp Automocin and Broadwind 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 Broadwind are associated (or correlated) with Gestamp Automocin. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gestamp Automocin has no effect on the direction of Broadwind i.e., Broadwind and Gestamp Automocin go up and down completely randomly.
Pair Corralation between Broadwind and Gestamp Automocin
Assuming the 90 days trading horizon Broadwind is expected to generate 2.23 times more return on investment than Gestamp Automocin. However, Broadwind is 2.23 times more volatile than Gestamp Automocin SA. It trades about -0.03 of its potential returns per unit of risk. Gestamp Automocin SA is currently generating about -0.1 per unit of risk. If you would invest 184.00 in Broadwind on September 4, 2024 and sell it today you would lose (11.00) from holding Broadwind or give up 5.98% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Broadwind vs. Gestamp Automocin SA
Performance |
| Timeline |
| Broadwind |
| Gestamp Automocin |
Broadwind and Gestamp Automocin Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Broadwind and Gestamp Automocin
The main advantage of trading using opposite Broadwind and Gestamp Automocin positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Broadwind position performs unexpectedly, Gestamp Automocin 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 Gestamp Automocin will offset losses from the drop in Gestamp Automocin's long position.| Broadwind vs. MINCO SILVER | Broadwind vs. Ming Le Sports | Broadwind vs. GRIFFIN MINING LTD | Broadwind vs. CI GAMES SA |
| Gestamp Automocin vs. Gold Road Resources | Gestamp Automocin vs. Gaztransport Technigaz SA | Gestamp Automocin vs. Broadwind | Gestamp Automocin vs. Commonwealth Bank of |
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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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