Correlation Between Greatland Gold and Datagroup
Can any of the company-specific risk be diversified away by investing in both Greatland Gold and Datagroup 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 Greatland Gold and Datagroup into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Greatland Gold plc and Datagroup SE, you can compare the effects of market volatilities on Greatland Gold and Datagroup 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 Greatland Gold with a short position of Datagroup. Check out your portfolio center. Please also check ongoing floating volatility patterns of Greatland Gold and Datagroup.
Diversification Opportunities for Greatland Gold and Datagroup
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Greatland and Datagroup is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Greatland Gold plc and Datagroup SE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Datagroup SE and Greatland Gold 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 Greatland Gold plc are associated (or correlated) with Datagroup. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Datagroup SE has no effect on the direction of Greatland Gold i.e., Greatland Gold and Datagroup go up and down completely randomly.
Pair Corralation between Greatland Gold and Datagroup
Assuming the 90 days trading horizon Greatland Gold plc is expected to generate 1.78 times more return on investment than Datagroup. However, Greatland Gold is 1.78 times more volatile than Datagroup SE. It trades about 0.02 of its potential returns per unit of risk. Datagroup SE is currently generating about -0.02 per unit of risk. If you would invest 800.00 in Greatland Gold plc on September 13, 2024 and sell it today you would lose (35.00) from holding Greatland Gold plc or give up 4.37% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 99.4% |
| Values | Daily Returns |
Greatland Gold plc vs. Datagroup SE
Performance |
| Timeline |
| Greatland Gold plc |
| Datagroup SE |
Greatland Gold and Datagroup Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Greatland Gold and Datagroup
The main advantage of trading using opposite Greatland Gold and Datagroup positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Greatland Gold position performs unexpectedly, Datagroup 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 Datagroup will offset losses from the drop in Datagroup's long position.| Greatland Gold vs. Zoom Video Communications | Greatland Gold vs. Charter Communications Cl | Greatland Gold vs. Albion Technology General | Greatland Gold vs. Team Internet Group |
| Datagroup vs. Samsung Electronics Co | Datagroup vs. Samsung Electronics Co | Datagroup vs. Hyundai Motor | Datagroup vs. Reliance Industries Ltd |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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