Correlation Between G8 Education and Retail Food
Can any of the company-specific risk be diversified away by investing in both G8 Education and Retail Food 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 G8 Education and Retail Food into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between G8 Education and Retail Food Group, you can compare the effects of market volatilities on G8 Education and Retail Food 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 G8 Education with a short position of Retail Food. Check out your portfolio center. Please also check ongoing floating volatility patterns of G8 Education and Retail Food.
Diversification Opportunities for G8 Education and Retail Food
0.18 | Correlation Coefficient |
Average diversification
The 3 months correlation between GEM and Retail is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding G8 Education and Retail Food Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Retail Food Group and G8 Education 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 G8 Education are associated (or correlated) with Retail Food. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Retail Food Group has no effect on the direction of G8 Education i.e., G8 Education and Retail Food go up and down completely randomly.
Pair Corralation between G8 Education and Retail Food
Assuming the 90 days trading horizon G8 Education is expected to generate 0.71 times more return on investment than Retail Food. However, G8 Education is 1.42 times less risky than Retail Food. It trades about 0.12 of its potential returns per unit of risk. Retail Food Group is currently generating about -0.39 per unit of risk. If you would invest 133.00 in G8 Education on November 2, 2024 and sell it today you would earn a total of 5.00 from holding G8 Education or generate 3.76% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
G8 Education vs. Retail Food Group
Performance |
| Timeline |
| G8 Education |
| Retail Food Group |
G8 Education and Retail Food Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with G8 Education and Retail Food
The main advantage of trading using opposite G8 Education and Retail Food positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if G8 Education position performs unexpectedly, Retail Food 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 Retail Food will offset losses from the drop in Retail Food's long position.| G8 Education vs. MotorCycle Holdings | G8 Education vs. Home Consortium | G8 Education vs. Cosmo Metals | G8 Education vs. Ramsay Health Care |
| Retail Food vs. Mirrabooka Investments | Retail Food vs. Oneview Healthcare PLC | Retail Food vs. Health and Plant | Retail Food vs. Global Health |
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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