Correlation Between Great Portland and CREMETRSBI DL-001
Can any of the company-specific risk be diversified away by investing in both Great Portland and CREMETRSBI DL-001 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 Great Portland and CREMETRSBI DL-001 into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Great Portland Estates and CREMECOMTRSBI DL 001, you can compare the effects of market volatilities on Great Portland and CREMETRSBI DL-001 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 Great Portland with a short position of CREMETRSBI DL-001. Check out your portfolio center. Please also check ongoing floating volatility patterns of Great Portland and CREMETRSBI DL-001.
Diversification Opportunities for Great Portland and CREMETRSBI DL-001
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Great and CREMETRSBI is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Great Portland Estates and CREMECOMTRSBI DL 001 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CREMECOMTRSBI DL 001 and Great Portland 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 Great Portland Estates are associated (or correlated) with CREMETRSBI DL-001. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CREMECOMTRSBI DL 001 has no effect on the direction of Great Portland i.e., Great Portland and CREMETRSBI DL-001 go up and down completely randomly.
Pair Corralation between Great Portland and CREMETRSBI DL-001
Assuming the 90 days trading horizon Great Portland Estates is expected to generate 0.59 times more return on investment than CREMETRSBI DL-001. However, Great Portland Estates is 1.7 times less risky than CREMETRSBI DL-001. It trades about -0.02 of its potential returns per unit of risk. CREMECOMTRSBI DL 001 is currently generating about -0.21 per unit of risk. If you would invest 342.00 in Great Portland Estates on November 3, 2024 and sell it today you would lose (4.00) from holding Great Portland Estates or give up 1.17% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Great Portland Estates vs. CREMECOMTRSBI DL 001
Performance |
| Timeline |
| Great Portland Estates |
| CREMECOMTRSBI DL 001 |
Great Portland and CREMETRSBI DL-001 Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Great Portland and CREMETRSBI DL-001
The main advantage of trading using opposite Great Portland and CREMETRSBI DL-001 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Great Portland position performs unexpectedly, CREMETRSBI DL-001 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 CREMETRSBI DL-001 will offset losses from the drop in CREMETRSBI DL-001's long position.| Great Portland vs. Cars Inc | Great Portland vs. CHINA TONTINE WINES | Great Portland vs. Burlington Stores | Great Portland vs. Ross Stores |
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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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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