Correlation Between Guild Esports and DFS Furniture
Can any of the company-specific risk be diversified away by investing in both Guild Esports 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 Guild Esports and DFS Furniture into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Guild Esports Plc and DFS Furniture PLC, you can compare the effects of market volatilities on Guild Esports 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 Guild Esports with a short position of DFS Furniture. Check out your portfolio center. Please also check ongoing floating volatility patterns of Guild Esports and DFS Furniture.
Diversification Opportunities for Guild Esports and DFS Furniture
0.17 | Correlation Coefficient |
Average diversification
The 3 months correlation between Guild and DFS is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding Guild Esports 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 Guild Esports 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 Guild Esports 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 Guild Esports i.e., Guild Esports and DFS Furniture go up and down completely randomly.
Pair Corralation between Guild Esports and DFS Furniture
Assuming the 90 days trading horizon Guild Esports Plc is expected to generate 3.52 times more return on investment than DFS Furniture. However, Guild Esports is 3.52 times more volatile than DFS Furniture PLC. It trades about 0.21 of its potential returns per unit of risk. DFS Furniture PLC is currently generating about -0.03 per unit of risk. If you would invest 3.10 in Guild Esports Plc on October 30, 2024 and sell it today you would earn a total of 1.90 from holding Guild Esports Plc or generate 61.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Guild Esports Plc vs. DFS Furniture PLC
Performance |
| Timeline |
| Guild Esports Plc |
| DFS Furniture PLC |
Guild Esports and DFS Furniture Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Guild Esports and DFS Furniture
The main advantage of trading using opposite Guild Esports and DFS Furniture positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Guild Esports 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.| Guild Esports vs. Spotify Technology SA | Guild Esports vs. Aptitude Software Group | Guild Esports vs. Nordic Semiconductor ASA | Guild Esports vs. Global Net Lease |
| DFS Furniture vs. Live Nation Entertainment | DFS Furniture vs. mobilezone holding AG | DFS Furniture vs. Compagnie Plastic Omnium | DFS Furniture vs. Applied Materials |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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