Correlation Between Cornish Metals and Gfinity PLC
Can any of the company-specific risk be diversified away by investing in both Cornish Metals 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 Cornish Metals and Gfinity PLC into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cornish Metals and Gfinity PLC, you can compare the effects of market volatilities on Cornish Metals 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 Cornish Metals with a short position of Gfinity PLC. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cornish Metals and Gfinity PLC.
Diversification Opportunities for Cornish Metals and Gfinity PLC
0.52 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Cornish and Gfinity is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding Cornish Metals and Gfinity PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gfinity PLC and Cornish Metals 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 Cornish Metals 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 Cornish Metals i.e., Cornish Metals and Gfinity PLC go up and down completely randomly.
Pair Corralation between Cornish Metals and Gfinity PLC
Assuming the 90 days trading horizon Cornish Metals is expected to under-perform the Gfinity PLC. But the stock apears to be less risky and, when comparing its historical volatility, Cornish Metals is 2.44 times less risky than Gfinity PLC. The stock trades about -0.01 of its potential returns per unit of risk. The Gfinity PLC is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest 46.00 in Gfinity PLC on October 13, 2024 and sell it today you would lose (38.50) from holding Gfinity PLC or give up 83.7% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 98.8% |
| Values | Daily Returns |
Cornish Metals vs. Gfinity PLC
Performance |
| Timeline |
| Cornish Metals |
| Gfinity PLC |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Solid
Cornish Metals and Gfinity PLC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cornish Metals and Gfinity PLC
The main advantage of trading using opposite Cornish Metals and Gfinity PLC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cornish Metals 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.| Cornish Metals vs. Alfa Financial Software | Cornish Metals vs. Vitec Software Group | Cornish Metals vs. Teradata Corp | Cornish Metals vs. Impax Environmental Markets |
| Gfinity PLC vs. Cairo Communication SpA | Gfinity PLC vs. Zegona Communications Plc | Gfinity PLC vs. Optima Health plc | Gfinity PLC vs. Universal Display Corp |
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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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