Correlation Between Garo AB and XMReality
Can any of the company-specific risk be diversified away by investing in both Garo AB and XMReality 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 Garo AB and XMReality into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Garo AB and XMReality AB, you can compare the effects of market volatilities on Garo AB and XMReality 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 Garo AB with a short position of XMReality. Check out your portfolio center. Please also check ongoing floating volatility patterns of Garo AB and XMReality.
Diversification Opportunities for Garo AB and XMReality
Very poor diversification
The 3 months correlation between Garo and XMReality is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Garo AB and XMReality AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on XMReality AB and Garo AB 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 Garo AB are associated (or correlated) with XMReality. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of XMReality AB has no effect on the direction of Garo AB i.e., Garo AB and XMReality go up and down completely randomly.
Pair Corralation between Garo AB and XMReality
Assuming the 90 days trading horizon Garo AB is expected to generate 0.23 times more return on investment than XMReality. However, Garo AB is 4.42 times less risky than XMReality. It trades about -0.07 of its potential returns per unit of risk. XMReality AB is currently generating about -0.07 per unit of risk. If you would invest 2,900 in Garo AB on August 25, 2024 and sell it today you would lose (922.00) from holding Garo AB or give up 31.79% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Garo AB vs. XMReality AB
Performance |
| Timeline |
| Garo AB |
| XMReality AB |
Garo AB and XMReality Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Garo AB and XMReality
The main advantage of trading using opposite Garo AB and XMReality positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Garo AB position performs unexpectedly, XMReality 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 XMReality will offset losses from the drop in XMReality's long position.| Garo AB vs. Troax Group AB | Garo AB vs. NIBE Industrier AB | Garo AB vs. Hexatronic Group AB | Garo AB vs. Bufab Holding AB |
| XMReality vs. Tangiamo Touch Technology | XMReality vs. Zaplox AB | XMReality vs. Alligator Bioscience AB | XMReality vs. Garo AB |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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