Correlation Between GP Investments and Multilaser Industrial
Can any of the company-specific risk be diversified away by investing in both GP Investments and Multilaser Industrial 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 GP Investments and Multilaser Industrial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GP Investments and Multilaser Industrial SA, you can compare the effects of market volatilities on GP Investments and Multilaser Industrial 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 GP Investments with a short position of Multilaser Industrial. Check out your portfolio center. Please also check ongoing floating volatility patterns of GP Investments and Multilaser Industrial.
Diversification Opportunities for GP Investments and Multilaser Industrial
0.22 | Correlation Coefficient |
Modest diversification
The 3 months correlation between GPIV33 and Multilaser is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding GP Investments and Multilaser Industrial SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Multilaser Industrial and GP Investments 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 GP Investments are associated (or correlated) with Multilaser Industrial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Multilaser Industrial has no effect on the direction of GP Investments i.e., GP Investments and Multilaser Industrial go up and down completely randomly.
Pair Corralation between GP Investments and Multilaser Industrial
Assuming the 90 days trading horizon GP Investments is expected to generate 0.73 times more return on investment than Multilaser Industrial. However, GP Investments is 1.36 times less risky than Multilaser Industrial. It trades about 0.16 of its potential returns per unit of risk. Multilaser Industrial SA is currently generating about -0.3 per unit of risk. If you would invest 365.00 in GP Investments on August 31, 2024 and sell it today you would earn a total of 33.00 from holding GP Investments or generate 9.04% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
GP Investments vs. Multilaser Industrial SA
Performance |
| Timeline |
| GP Investments |
| Multilaser Industrial |
GP Investments and Multilaser Industrial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GP Investments and Multilaser Industrial
The main advantage of trading using opposite GP Investments and Multilaser Industrial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GP Investments position performs unexpectedly, Multilaser Industrial 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 Multilaser Industrial will offset losses from the drop in Multilaser Industrial's long position.| GP Investments vs. The Bank of | GP Investments vs. Ameriprise Financial | GP Investments vs. Banco BTG Pactual | GP Investments vs. Banco BTG Pactual |
| Multilaser Industrial vs. Pet Center Comrcio | Multilaser Industrial vs. Locaweb Servios de | Multilaser Industrial vs. Mliuz SA | Multilaser Industrial vs. Fras le SA |
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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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