Correlation Between Getty Images and Big Tree
Can any of the company-specific risk be diversified away by investing in both Getty Images and Big Tree 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 Getty Images and Big Tree into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Getty Images Holdings and Big Tree Cloud, you can compare the effects of market volatilities on Getty Images and Big Tree 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 Getty Images with a short position of Big Tree. Check out your portfolio center. Please also check ongoing floating volatility patterns of Getty Images and Big Tree.
Diversification Opportunities for Getty Images and Big Tree
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Getty and Big is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Getty Images Holdings and Big Tree Cloud in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Big Tree Cloud and Getty Images 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 Getty Images Holdings are associated (or correlated) with Big Tree. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Big Tree Cloud has no effect on the direction of Getty Images i.e., Getty Images and Big Tree go up and down completely randomly.
Pair Corralation between Getty Images and Big Tree
Given the investment horizon of 90 days Getty Images Holdings is expected to generate 0.55 times more return on investment than Big Tree. However, Getty Images Holdings is 1.82 times less risky than Big Tree. It trades about 0.15 of its potential returns per unit of risk. Big Tree Cloud is currently generating about 0.08 per unit of risk. If you would invest 229.00 in Getty Images Holdings on October 20, 2024 and sell it today you would earn a total of 46.00 from holding Getty Images Holdings or generate 20.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Getty Images Holdings vs. Big Tree Cloud
Performance |
| Timeline |
| Getty Images Holdings |
| Big Tree Cloud |
Getty Images and Big Tree Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Getty Images and Big Tree
The main advantage of trading using opposite Getty Images and Big Tree positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Getty Images position performs unexpectedly, Big Tree 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 Big Tree will offset losses from the drop in Big Tree's long position.| Getty Images vs. Twilio Inc | Getty Images vs. Baidu Inc | Getty Images vs. Snap Inc | Getty Images vs. ANGI Homeservices |
| Big Tree vs. EMCOR Group | Big Tree vs. Griffon | Big Tree vs. Tritent International Agriculture | Big Tree vs. AKITA Drilling |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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