Correlation Between GOME Retail and Scottish Mortgage
Can any of the company-specific risk be diversified away by investing in both GOME Retail and Scottish Mortgage 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 GOME Retail and Scottish Mortgage into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GOME Retail Holdings and Scottish Mortgage Investment, you can compare the effects of market volatilities on GOME Retail and Scottish Mortgage 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 GOME Retail with a short position of Scottish Mortgage. Check out your portfolio center. Please also check ongoing floating volatility patterns of GOME Retail and Scottish Mortgage.
Diversification Opportunities for GOME Retail and Scottish Mortgage
-0.51 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between GOME and Scottish is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding GOME Retail Holdings and Scottish Mortgage Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Scottish Mortgage and GOME Retail 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 GOME Retail Holdings are associated (or correlated) with Scottish Mortgage. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Scottish Mortgage has no effect on the direction of GOME Retail i.e., GOME Retail and Scottish Mortgage go up and down completely randomly.
Pair Corralation between GOME Retail and Scottish Mortgage
Assuming the 90 days trading horizon GOME Retail Holdings is expected to under-perform the Scottish Mortgage. In addition to that, GOME Retail is 3.12 times more volatile than Scottish Mortgage Investment. It trades about -0.13 of its total potential returns per unit of risk. Scottish Mortgage Investment is currently generating about 0.2 per unit of volatility. If you would invest 1,096 in Scottish Mortgage Investment on November 8, 2024 and sell it today you would earn a total of 188.00 from holding Scottish Mortgage Investment or generate 17.15% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 98.33% |
| Values | Daily Returns |
GOME Retail Holdings vs. Scottish Mortgage Investment
Performance |
| Timeline |
| GOME Retail Holdings |
| Scottish Mortgage |
GOME Retail and Scottish Mortgage Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GOME Retail and Scottish Mortgage
The main advantage of trading using opposite GOME Retail and Scottish Mortgage positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GOME Retail position performs unexpectedly, Scottish Mortgage 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 Scottish Mortgage will offset losses from the drop in Scottish Mortgage's long position.| GOME Retail vs. OReilly Automotive | GOME Retail vs. AutoZone | GOME Retail vs. Tractor Supply | GOME Retail vs. Ulta Beauty |
| Scottish Mortgage vs. The Hanover Insurance | Scottish Mortgage vs. PANIN INSURANCE | Scottish Mortgage vs. TT Electronics PLC | Scottish Mortgage vs. Samsung Electronics Co |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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