Correlation Between Gamma Communications and Bankers Investment
Can any of the company-specific risk be diversified away by investing in both Gamma Communications and Bankers Investment 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 Gamma Communications and Bankers Investment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Gamma Communications PLC and Bankers Investment Trust, you can compare the effects of market volatilities on Gamma Communications and Bankers Investment 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 Gamma Communications with a short position of Bankers Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gamma Communications and Bankers Investment.
Diversification Opportunities for Gamma Communications and Bankers Investment
-0.18 | Correlation Coefficient |
Good diversification
The 3 months correlation between Gamma and Bankers is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding Gamma Communications PLC and Bankers Investment Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bankers Investment Trust and Gamma Communications 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 Gamma Communications PLC are associated (or correlated) with Bankers Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bankers Investment Trust has no effect on the direction of Gamma Communications i.e., Gamma Communications and Bankers Investment go up and down completely randomly.
Pair Corralation between Gamma Communications and Bankers Investment
Assuming the 90 days trading horizon Gamma Communications PLC is expected to generate 1.83 times more return on investment than Bankers Investment. However, Gamma Communications is 1.83 times more volatile than Bankers Investment Trust. It trades about 0.06 of its potential returns per unit of risk. Bankers Investment Trust is currently generating about 0.05 per unit of risk. If you would invest 144,448 in Gamma Communications PLC on August 30, 2024 and sell it today you would earn a total of 17,152 from holding Gamma Communications PLC or generate 11.87% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Gamma Communications PLC vs. Bankers Investment Trust
Performance |
| Timeline |
| Gamma Communications PLC |
| Bankers Investment Trust |
Gamma Communications and Bankers Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gamma Communications and Bankers Investment
The main advantage of trading using opposite Gamma Communications and Bankers Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gamma Communications position performs unexpectedly, Bankers Investment 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 Bankers Investment will offset losses from the drop in Bankers Investment's long position.| Gamma Communications vs. CVR Energy | Gamma Communications vs. Viridian Therapeutics | Gamma Communications vs. Dollar Tree | Gamma Communications vs. News Corp Cl |
| Bankers Investment vs. Samsung Electronics Co | Bankers Investment vs. Samsung Electronics Co | Bankers Investment vs. Hyundai Motor | Bankers Investment vs. Toyota Motor 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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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