Correlation Between GP Investments and Pettenati
Can any of the company-specific risk be diversified away by investing in both GP Investments and Pettenati 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 Pettenati into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GP Investments and Pettenati SA Industria, you can compare the effects of market volatilities on GP Investments and Pettenati 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 Pettenati. Check out your portfolio center. Please also check ongoing floating volatility patterns of GP Investments and Pettenati.
Diversification Opportunities for GP Investments and Pettenati
0.38 | Correlation Coefficient |
Weak diversification
The 3 months correlation between GPIV33 and Pettenati is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding GP Investments and Pettenati SA Industria in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pettenati SA Industria 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 Pettenati. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pettenati SA Industria has no effect on the direction of GP Investments i.e., GP Investments and Pettenati go up and down completely randomly.
Pair Corralation between GP Investments and Pettenati
Assuming the 90 days trading horizon GP Investments is expected to generate 1.65 times more return on investment than Pettenati. However, GP Investments is 1.65 times more volatile than Pettenati SA Industria. It trades about -0.03 of its potential returns per unit of risk. Pettenati SA Industria is currently generating about -0.26 per unit of risk. If you would invest 393.00 in GP Investments on September 12, 2024 and sell it today you would lose (12.00) from holding GP Investments or give up 3.05% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.24% |
| Values | Daily Returns |
GP Investments vs. Pettenati SA Industria
Performance |
| Timeline |
| GP Investments |
| Pettenati SA Industria |
GP Investments and Pettenati Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GP Investments and Pettenati
The main advantage of trading using opposite GP Investments and Pettenati positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GP Investments position performs unexpectedly, Pettenati 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 Pettenati will offset losses from the drop in Pettenati'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 |
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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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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