Correlation Between Buhler Industries and Gamehost
Can any of the company-specific risk be diversified away by investing in both Buhler Industries and Gamehost 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 Buhler Industries and Gamehost into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Buhler Industries and Gamehost, you can compare the effects of market volatilities on Buhler Industries and Gamehost 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 Buhler Industries with a short position of Gamehost. Check out your portfolio center. Please also check ongoing floating volatility patterns of Buhler Industries and Gamehost.
Diversification Opportunities for Buhler Industries and Gamehost
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Buhler and Gamehost is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Buhler Industries and Gamehost in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gamehost and Buhler Industries 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 Buhler Industries are associated (or correlated) with Gamehost. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gamehost has no effect on the direction of Buhler Industries i.e., Buhler Industries and Gamehost go up and down completely randomly.
Pair Corralation between Buhler Industries and Gamehost
Assuming the 90 days trading horizon Buhler Industries is expected to generate 2.3 times more return on investment than Gamehost. However, Buhler Industries is 2.3 times more volatile than Gamehost. It trades about 0.05 of its potential returns per unit of risk. Gamehost is currently generating about 0.06 per unit of risk. If you would invest 175.00 in Buhler Industries on September 14, 2024 and sell it today you would earn a total of 120.00 from holding Buhler Industries or generate 68.57% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Buhler Industries vs. Gamehost
Performance |
| Timeline |
| Buhler Industries |
| Gamehost |
Buhler Industries and Gamehost Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Buhler Industries and Gamehost
The main advantage of trading using opposite Buhler Industries and Gamehost positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Buhler Industries position performs unexpectedly, Gamehost 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 Gamehost will offset losses from the drop in Gamehost's long position.| Buhler Industries vs. Clarke Inc | Buhler Industries vs. Accord Financial Corp | Buhler Industries vs. ADF Group | Buhler Industries vs. Algoma Central |
| Gamehost vs. Berkshire Hathaway CDR | Gamehost vs. Microsoft Corp CDR | Gamehost vs. Apple Inc CDR | Gamehost vs. Alphabet Inc CDR |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
Other Complementary Tools
| Transaction History View history of all your transactions and understand their impact on performance | |
| Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing | |
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios | |
| Fundamental Analysis View fundamental data based on most recent published financial statements | |
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. |