Correlation Between Amedeo Air and Gfinity PLC
Can any of the company-specific risk be diversified away by investing in both Amedeo Air and Gfinity PLC 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 Amedeo Air and Gfinity PLC into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Amedeo Air Four and Gfinity PLC, you can compare the effects of market volatilities on Amedeo Air and Gfinity PLC 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 Amedeo Air with a short position of Gfinity PLC. Check out your portfolio center. Please also check ongoing floating volatility patterns of Amedeo Air and Gfinity PLC.
Diversification Opportunities for Amedeo Air and Gfinity PLC
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Amedeo and Gfinity is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Amedeo Air Four and Gfinity PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gfinity PLC and Amedeo Air 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 Amedeo Air Four are associated (or correlated) with Gfinity PLC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gfinity PLC has no effect on the direction of Amedeo Air i.e., Amedeo Air and Gfinity PLC go up and down completely randomly.
Pair Corralation between Amedeo Air and Gfinity PLC
Assuming the 90 days trading horizon Amedeo Air is expected to generate 8.03 times less return on investment than Gfinity PLC. But when comparing it to its historical volatility, Amedeo Air Four is 17.91 times less risky than Gfinity PLC. It trades about 0.51 of its potential returns per unit of risk. Gfinity PLC is currently generating about 0.23 of returns per unit of risk over similar time horizon. If you would invest 1.75 in Gfinity PLC on September 2, 2024 and sell it today you would earn a total of 1.00 from holding Gfinity PLC or generate 57.14% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Amedeo Air Four vs. Gfinity PLC
Performance |
| Timeline |
| Amedeo Air Four |
| Gfinity PLC |
Amedeo Air and Gfinity PLC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Amedeo Air and Gfinity PLC
The main advantage of trading using opposite Amedeo Air and Gfinity PLC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Amedeo Air position performs unexpectedly, Gfinity PLC 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 Gfinity PLC will offset losses from the drop in Gfinity PLC's long position.| Amedeo Air vs. Spotify Technology SA | Amedeo Air vs. Air Products Chemicals | Amedeo Air vs. Cizzle Biotechnology Holdings | Amedeo Air vs. Finnair Oyj |
| Gfinity PLC vs. Porvair plc | Gfinity PLC vs. Silvercorp Metals | Gfinity PLC vs. Wizz Air Holdings | Gfinity PLC vs. Amedeo Air Four |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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