Correlation Between Getty Images and Montauk Renewables
Can any of the company-specific risk be diversified away by investing in both Getty Images and Montauk Renewables 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 Montauk Renewables 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 Montauk Renewables, you can compare the effects of market volatilities on Getty Images and Montauk Renewables 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 Montauk Renewables. Check out your portfolio center. Please also check ongoing floating volatility patterns of Getty Images and Montauk Renewables.
Diversification Opportunities for Getty Images and Montauk Renewables
0.79 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Getty and Montauk is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Getty Images Holdings and Montauk Renewables in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Montauk Renewables 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 Montauk Renewables. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Montauk Renewables has no effect on the direction of Getty Images i.e., Getty Images and Montauk Renewables go up and down completely randomly.
Pair Corralation between Getty Images and Montauk Renewables
Given the investment horizon of 90 days Getty Images Holdings is expected to under-perform the Montauk Renewables. But the stock apears to be less risky and, when comparing its historical volatility, Getty Images Holdings is 1.09 times less risky than Montauk Renewables. The stock trades about -0.23 of its potential returns per unit of risk. The Montauk Renewables is currently generating about -0.16 of returns per unit of risk over similar time horizon. If you would invest 570.00 in Montauk Renewables on August 30, 2024 and sell it today you would lose (127.00) from holding Montauk Renewables or give up 22.28% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Getty Images Holdings vs. Montauk Renewables
Performance |
| Timeline |
| Getty Images Holdings |
| Montauk Renewables |
Getty Images and Montauk Renewables Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Getty Images and Montauk Renewables
The main advantage of trading using opposite Getty Images and Montauk Renewables positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Getty Images position performs unexpectedly, Montauk Renewables 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 Montauk Renewables will offset losses from the drop in Montauk Renewables' long position.| Getty Images vs. Twilio Inc | Getty Images vs. Baidu Inc | Getty Images vs. Snap Inc | Getty Images vs. ANGI Homeservices |
| Montauk Renewables vs. Avista | Montauk Renewables vs. Allete Inc | Montauk Renewables vs. Black Hills | Montauk Renewables vs. Companhia Paranaense de |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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