Correlation Between Gfinity PLC and DFS Furniture
Can any of the company-specific risk be diversified away by investing in both Gfinity PLC and DFS Furniture 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 Gfinity PLC and DFS Furniture into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Gfinity PLC and DFS Furniture PLC, you can compare the effects of market volatilities on Gfinity PLC and DFS Furniture 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 Gfinity PLC with a short position of DFS Furniture. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gfinity PLC and DFS Furniture.
Diversification Opportunities for Gfinity PLC and DFS Furniture
0.01 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Gfinity and DFS is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding Gfinity PLC and DFS Furniture PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DFS Furniture PLC and Gfinity PLC 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 Gfinity PLC are associated (or correlated) with DFS Furniture. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DFS Furniture PLC has no effect on the direction of Gfinity PLC i.e., Gfinity PLC and DFS Furniture go up and down completely randomly.
Pair Corralation between Gfinity PLC and DFS Furniture
Assuming the 90 days trading horizon Gfinity PLC is expected to generate 4.49 times more return on investment than DFS Furniture. However, Gfinity PLC is 4.49 times more volatile than DFS Furniture PLC. It trades about 0.04 of its potential returns per unit of risk. DFS Furniture PLC is currently generating about 0.02 per unit of risk. If you would invest 12.00 in Gfinity PLC on December 11, 2024 and sell it today you would lose (3.50) from holding Gfinity PLC or give up 29.17% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 98.8% |
| Values | Daily Returns |
Gfinity PLC vs. DFS Furniture PLC
Performance |
| Timeline |
| Gfinity PLC |
| DFS Furniture PLC |
Gfinity PLC and DFS Furniture Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gfinity PLC and DFS Furniture
The main advantage of trading using opposite Gfinity PLC and DFS Furniture positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gfinity PLC position performs unexpectedly, DFS Furniture 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 DFS Furniture will offset losses from the drop in DFS Furniture's long position.| Gfinity PLC vs. European Metals Holdings | ||
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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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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