Correlation Between GOME Retail and WOLTERS KLUWER
Can any of the company-specific risk be diversified away by investing in both GOME Retail and WOLTERS KLUWER 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 WOLTERS KLUWER 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 WOLTERS KLUWER ADR, you can compare the effects of market volatilities on GOME Retail and WOLTERS KLUWER 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 WOLTERS KLUWER. Check out your portfolio center. Please also check ongoing floating volatility patterns of GOME Retail and WOLTERS KLUWER.
Diversification Opportunities for GOME Retail and WOLTERS KLUWER
-0.46 | Correlation Coefficient |
Very good diversification
The 3 months correlation between GOME and WOLTERS is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding GOME Retail Holdings and WOLTERS KLUWER ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WOLTERS KLUWER ADR 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 WOLTERS KLUWER. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WOLTERS KLUWER ADR has no effect on the direction of GOME Retail i.e., GOME Retail and WOLTERS KLUWER go up and down completely randomly.
Pair Corralation between GOME Retail and WOLTERS KLUWER
Assuming the 90 days trading horizon GOME Retail Holdings is expected to generate 7.44 times more return on investment than WOLTERS KLUWER. However, GOME Retail is 7.44 times more volatile than WOLTERS KLUWER ADR. It trades about 0.02 of its potential returns per unit of risk. WOLTERS KLUWER ADR is currently generating about 0.08 per unit of risk. If you would invest 1.20 in GOME Retail Holdings on October 31, 2024 and sell it today you would lose (1.10) from holding GOME Retail Holdings or give up 91.67% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 99.8% |
| Values | Daily Returns |
GOME Retail Holdings vs. WOLTERS KLUWER ADR
Performance |
| Timeline |
| GOME Retail Holdings |
| WOLTERS KLUWER ADR |
GOME Retail and WOLTERS KLUWER Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GOME Retail and WOLTERS KLUWER
The main advantage of trading using opposite GOME Retail and WOLTERS KLUWER positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GOME Retail position performs unexpectedly, WOLTERS KLUWER 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 WOLTERS KLUWER will offset losses from the drop in WOLTERS KLUWER's long position.| GOME Retail vs. New Residential Investment | GOME Retail vs. Gladstone Investment | GOME Retail vs. SENECA FOODS A | GOME Retail vs. EBRO FOODS |
| WOLTERS KLUWER vs. RELX PLC | WOLTERS KLUWER vs. Relx PLC ADR | WOLTERS KLUWER vs. Wolters Kluwer NV | WOLTERS KLUWER vs. Informa PLC |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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