Correlation Between Gol Intelligent and Universal Entertainment
Can any of the company-specific risk be diversified away by investing in both Gol Intelligent and Universal Entertainment 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 Gol Intelligent and Universal Entertainment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Gol Intelligent Airlines and Universal Entertainment, you can compare the effects of market volatilities on Gol Intelligent and Universal Entertainment 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 Gol Intelligent with a short position of Universal Entertainment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gol Intelligent and Universal Entertainment.
Diversification Opportunities for Gol Intelligent and Universal Entertainment
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Gol and Universal is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Gol Intelligent Airlines and Universal Entertainment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Universal Entertainment and Gol Intelligent 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 Gol Intelligent Airlines are associated (or correlated) with Universal Entertainment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Universal Entertainment has no effect on the direction of Gol Intelligent i.e., Gol Intelligent and Universal Entertainment go up and down completely randomly.
Pair Corralation between Gol Intelligent and Universal Entertainment
Assuming the 90 days trading horizon Gol Intelligent Airlines is expected to generate 2.8 times more return on investment than Universal Entertainment. However, Gol Intelligent is 2.8 times more volatile than Universal Entertainment. It trades about 0.0 of its potential returns per unit of risk. Universal Entertainment is currently generating about -0.05 per unit of risk. If you would invest 220.00 in Gol Intelligent Airlines on November 2, 2024 and sell it today you would lose (178.00) from holding Gol Intelligent Airlines or give up 80.91% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 99.8% |
| Values | Daily Returns |
Gol Intelligent Airlines vs. Universal Entertainment
Performance |
| Timeline |
| Gol Intelligent Airlines |
| Universal Entertainment |
Gol Intelligent and Universal Entertainment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gol Intelligent and Universal Entertainment
The main advantage of trading using opposite Gol Intelligent and Universal Entertainment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gol Intelligent position performs unexpectedly, Universal Entertainment 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 Universal Entertainment will offset losses from the drop in Universal Entertainment's long position.| Gol Intelligent vs. DAIRY FARM INTL | Gol Intelligent vs. PATTIES FOODS | Gol Intelligent vs. Penta Ocean Construction Co | Gol Intelligent vs. North American Construction |
| Universal Entertainment vs. Playtech plc | Universal Entertainment vs. BAKED GAMES SA | Universal Entertainment vs. PLAYMATES TOYS | Universal Entertainment vs. Hochschild Mining plc |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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