Correlation Between Getty Images and Whitbread Plc
Can any of the company-specific risk be diversified away by investing in both Getty Images and Whitbread Plc 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 Whitbread Plc 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 Whitbread plc, you can compare the effects of market volatilities on Getty Images and Whitbread Plc 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 Whitbread Plc. Check out your portfolio center. Please also check ongoing floating volatility patterns of Getty Images and Whitbread Plc.
Diversification Opportunities for Getty Images and Whitbread Plc
0.6 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Getty and Whitbread is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Getty Images Holdings and Whitbread plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Whitbread plc 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 Whitbread Plc. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Whitbread plc has no effect on the direction of Getty Images i.e., Getty Images and Whitbread Plc go up and down completely randomly.
Pair Corralation between Getty Images and Whitbread Plc
Given the investment horizon of 90 days Getty Images Holdings is expected to under-perform the Whitbread Plc. In addition to that, Getty Images is 2.74 times more volatile than Whitbread plc. It trades about -0.08 of its total potential returns per unit of risk. Whitbread plc is currently generating about -0.14 per unit of volatility. If you would invest 4,441 in Whitbread plc on October 25, 2024 and sell it today you would lose (845.00) from holding Whitbread plc or give up 19.03% 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. Whitbread plc
Performance |
| Timeline |
| Getty Images Holdings |
| Whitbread plc |
Getty Images and Whitbread Plc Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Getty Images and Whitbread Plc
The main advantage of trading using opposite Getty Images and Whitbread Plc positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Getty Images position performs unexpectedly, Whitbread Plc 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 Whitbread Plc will offset losses from the drop in Whitbread Plc's long position.| Getty Images vs. Twilio Inc | Getty Images vs. Baidu Inc | Getty Images vs. Snap Inc | Getty Images vs. ANGI Homeservices |
| Whitbread Plc vs. Pembina Pipeline | Whitbread Plc vs. Hillman Solutions Corp | Whitbread Plc vs. Snap On | Whitbread Plc vs. Nike Inc |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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