Correlation Between GSW Immobilien and Reliance Steel
Can any of the company-specific risk be diversified away by investing in both GSW Immobilien and Reliance Steel 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 GSW Immobilien and Reliance Steel into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GSW Immobilien AG and Reliance Steel Aluminum, you can compare the effects of market volatilities on GSW Immobilien and Reliance Steel 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 GSW Immobilien with a short position of Reliance Steel. Check out your portfolio center. Please also check ongoing floating volatility patterns of GSW Immobilien and Reliance Steel.
Diversification Opportunities for GSW Immobilien and Reliance Steel
-0.48 | Correlation Coefficient |
Very good diversification
The 3 months correlation between GSW and Reliance is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding GSW Immobilien AG and Reliance Steel Aluminum in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Reliance Steel Aluminum and GSW Immobilien 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 GSW Immobilien AG are associated (or correlated) with Reliance Steel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Reliance Steel Aluminum has no effect on the direction of GSW Immobilien i.e., GSW Immobilien and Reliance Steel go up and down completely randomly.
Pair Corralation between GSW Immobilien and Reliance Steel
Assuming the 90 days trading horizon GSW Immobilien AG is expected to generate 4.72 times more return on investment than Reliance Steel. However, GSW Immobilien is 4.72 times more volatile than Reliance Steel Aluminum. It trades about 0.05 of its potential returns per unit of risk. Reliance Steel Aluminum is currently generating about 0.05 per unit of risk. If you would invest 6,800 in GSW Immobilien AG on November 3, 2024 and sell it today you would earn a total of 1,000.00 from holding GSW Immobilien AG or generate 14.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
GSW Immobilien AG vs. Reliance Steel Aluminum
Performance |
| Timeline |
| GSW Immobilien AG |
| Reliance Steel Aluminum |
GSW Immobilien and Reliance Steel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GSW Immobilien and Reliance Steel
The main advantage of trading using opposite GSW Immobilien and Reliance Steel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GSW Immobilien position performs unexpectedly, Reliance Steel 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 Reliance Steel will offset losses from the drop in Reliance Steel's long position.| GSW Immobilien vs. Columbia Sportswear | GSW Immobilien vs. USWE SPORTS AB | GSW Immobilien vs. MAGNUM MINING EXP | GSW Immobilien vs. Jacquet Metal Service |
| Reliance Steel vs. APPLIED MATERIALS | Reliance Steel vs. THRACE PLASTICS | Reliance Steel vs. SANOK RUBBER ZY | Reliance Steel vs. Materialise NV |
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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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