Correlation Between Guild Esports and European Metals
Can any of the company-specific risk be diversified away by investing in both Guild Esports and European Metals 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 European Metals 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 European Metals Holdings, you can compare the effects of market volatilities on Guild Esports and European Metals 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 European Metals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Guild Esports and European Metals.
Diversification Opportunities for Guild Esports and European Metals
0.19 | Correlation Coefficient |
Average diversification
The 3 months correlation between Guild and European is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding Guild Esports Plc and European Metals Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on European Metals Holdings 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 European Metals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of European Metals Holdings has no effect on the direction of Guild Esports i.e., Guild Esports and European Metals go up and down completely randomly.
Pair Corralation between Guild Esports and European Metals
Assuming the 90 days trading horizon Guild Esports Plc is expected to generate 2.46 times more return on investment than European Metals. However, Guild Esports is 2.46 times more volatile than European Metals Holdings. It trades about 0.16 of its potential returns per unit of risk. European Metals Holdings is currently generating about 0.11 per unit of risk. If you would invest 4.00 in Guild Esports Plc on October 30, 2024 and sell it today you would earn a total of 1.00 from holding Guild Esports Plc or generate 25.0% 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. European Metals Holdings
Performance |
| Timeline |
| Guild Esports Plc |
| European Metals Holdings |
Guild Esports and European Metals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Guild Esports and European Metals
The main advantage of trading using opposite Guild Esports and European Metals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Guild Esports position performs unexpectedly, European Metals 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 European Metals will offset losses from the drop in European Metals' 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 |
| European Metals vs. Ebro Foods | European Metals vs. Zoom Video Communications | European Metals vs. Hilton Food Group | European Metals vs. Vienna Insurance Group |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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