Correlation Between GomSpace Group and Africa Oil
Can any of the company-specific risk be diversified away by investing in both GomSpace Group and Africa Oil 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 GomSpace Group and Africa Oil into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GomSpace Group AB and Africa Oil Corp, you can compare the effects of market volatilities on GomSpace Group and Africa Oil 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 GomSpace Group with a short position of Africa Oil. Check out your portfolio center. Please also check ongoing floating volatility patterns of GomSpace Group and Africa Oil.
Diversification Opportunities for GomSpace Group and Africa Oil
0.1 | Correlation Coefficient |
Average diversification
The 3 months correlation between GomSpace and Africa is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding GomSpace Group AB and Africa Oil Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Africa Oil Corp and GomSpace Group 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 GomSpace Group AB are associated (or correlated) with Africa Oil. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Africa Oil Corp has no effect on the direction of GomSpace Group i.e., GomSpace Group and Africa Oil go up and down completely randomly.
Pair Corralation between GomSpace Group and Africa Oil
Assuming the 90 days trading horizon GomSpace Group AB is expected to generate 2.8 times more return on investment than Africa Oil. However, GomSpace Group is 2.8 times more volatile than Africa Oil Corp. It trades about 0.04 of its potential returns per unit of risk. Africa Oil Corp is currently generating about -0.01 per unit of risk. If you would invest 345.00 in GomSpace Group AB on September 25, 2024 and sell it today you would earn a total of 103.00 from holding GomSpace Group AB or generate 29.86% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
GomSpace Group AB vs. Africa Oil Corp
Performance |
| Timeline |
| GomSpace Group AB |
| Africa Oil Corp |
GomSpace Group and Africa Oil Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GomSpace Group and Africa Oil
The main advantage of trading using opposite GomSpace Group and Africa Oil positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GomSpace Group position performs unexpectedly, Africa Oil 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 Africa Oil will offset losses from the drop in Africa Oil's long position.| GomSpace Group vs. Samhllsbyggnadsbolaget i Norden | GomSpace Group vs. Sinch AB | GomSpace Group vs. Evolution AB | GomSpace Group vs. NIBE Industrier AB |
| Africa Oil vs. GomSpace Group AB | Africa Oil vs. SaltX Technology Holding | Africa Oil vs. Ambu AS | Africa Oil vs. Fingerprint Cards AB |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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