Correlation Between GDI Property and Cromwell Property
Can any of the company-specific risk be diversified away by investing in both GDI Property and Cromwell Property 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 GDI Property and Cromwell Property into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GDI Property Group and Cromwell Property Group, you can compare the effects of market volatilities on GDI Property and Cromwell Property 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 GDI Property with a short position of Cromwell Property. Check out your portfolio center. Please also check ongoing floating volatility patterns of GDI Property and Cromwell Property.
Diversification Opportunities for GDI Property and Cromwell Property
0.54 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between GDI and Cromwell is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding GDI Property Group and Cromwell Property Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cromwell Property and GDI Property 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 GDI Property Group are associated (or correlated) with Cromwell Property. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cromwell Property has no effect on the direction of GDI Property i.e., GDI Property and Cromwell Property go up and down completely randomly.
Pair Corralation between GDI Property and Cromwell Property
Assuming the 90 days trading horizon GDI Property Group is expected to under-perform the Cromwell Property. But the stock apears to be less risky and, when comparing its historical volatility, GDI Property Group is 1.23 times less risky than Cromwell Property. The stock trades about -0.01 of its potential returns per unit of risk. The Cromwell Property Group is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 39.00 in Cromwell Property Group on August 28, 2024 and sell it today you would lose (1.00) from holding Cromwell Property Group or give up 2.56% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 99.53% |
| Values | Daily Returns |
GDI Property Group vs. Cromwell Property Group
Performance |
| Timeline |
| GDI Property Group |
| Cromwell Property |
GDI Property and Cromwell Property Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GDI Property and Cromwell Property
The main advantage of trading using opposite GDI Property and Cromwell Property positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GDI Property position performs unexpectedly, Cromwell Property 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 Cromwell Property will offset losses from the drop in Cromwell Property's long position.| GDI Property vs. Black Rock Mining | GDI Property vs. Health and Plant | GDI Property vs. Prime Financial Group | GDI Property vs. Epsilon Healthcare |
| Cromwell Property vs. Super Retail Group | Cromwell Property vs. Kingsrose Mining | Cromwell Property vs. Perseus Mining | Cromwell Property vs. Charter Hall Education |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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