Correlation Between Cardano and GB Group
Can any of the company-specific risk be diversified away by investing in both Cardano and GB Group 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 Cardano and GB Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cardano and GB Group plc, you can compare the effects of market volatilities on Cardano and GB Group 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 Cardano with a short position of GB Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cardano and GB Group.
Diversification Opportunities for Cardano and GB Group
Very poor diversification
The 3 months correlation between Cardano and 0GB is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Cardano and GB Group plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GB Group plc and Cardano 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 Cardano are associated (or correlated) with GB Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GB Group plc has no effect on the direction of Cardano i.e., Cardano and GB Group go up and down completely randomly.
Pair Corralation between Cardano and GB Group
Assuming the 90 days trading horizon Cardano is expected to generate 4.82 times more return on investment than GB Group. However, Cardano is 4.82 times more volatile than GB Group plc. It trades about 0.02 of its potential returns per unit of risk. GB Group plc is currently generating about -0.36 per unit of risk. If you would invest 102.00 in Cardano on October 10, 2024 and sell it today you would lose (1.00) from holding Cardano or give up 0.98% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 80.95% |
| Values | Daily Returns |
Cardano vs. GB Group plc
Performance |
| Timeline |
| Cardano |
| GB Group plc |
Cardano and GB Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cardano and GB Group
The main advantage of trading using opposite Cardano and GB Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cardano position performs unexpectedly, GB Group 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 GB Group will offset losses from the drop in GB Group's long position.The idea behind Cardano and GB Group plc pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| GB Group vs. Scottish Mortgage Investment | GB Group vs. Thai Beverage Public | GB Group vs. Gladstone Investment | GB Group vs. Performance Food Group |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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