Correlation Between GSTechnologies and LBG Media
Can any of the company-specific risk be diversified away by investing in both GSTechnologies and LBG Media 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 GSTechnologies and LBG Media into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GSTechnologies and LBG Media PLC, you can compare the effects of market volatilities on GSTechnologies and LBG Media 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 GSTechnologies with a short position of LBG Media. Check out your portfolio center. Please also check ongoing floating volatility patterns of GSTechnologies and LBG Media.
Diversification Opportunities for GSTechnologies and LBG Media
-0.05 | Correlation Coefficient |
Good diversification
The 3 months correlation between GSTechnologies and LBG is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding GSTechnologies and LBG Media PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LBG Media PLC and GSTechnologies 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 GSTechnologies are associated (or correlated) with LBG Media. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LBG Media PLC has no effect on the direction of GSTechnologies i.e., GSTechnologies and LBG Media go up and down completely randomly.
Pair Corralation between GSTechnologies and LBG Media
Assuming the 90 days trading horizon GSTechnologies is expected to generate 3.0 times more return on investment than LBG Media. However, GSTechnologies is 3.0 times more volatile than LBG Media PLC. It trades about 0.47 of its potential returns per unit of risk. LBG Media PLC is currently generating about 0.11 per unit of risk. If you would invest 158.00 in GSTechnologies on October 12, 2024 and sell it today you would earn a total of 147.00 from holding GSTechnologies or generate 93.04% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
GSTechnologies vs. LBG Media PLC
Performance |
| Timeline |
| GSTechnologies |
| LBG Media PLC |
GSTechnologies and LBG Media Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GSTechnologies and LBG Media
The main advantage of trading using opposite GSTechnologies and LBG Media positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GSTechnologies position performs unexpectedly, LBG Media 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 LBG Media will offset losses from the drop in LBG Media's long position.| GSTechnologies vs. Wheaton Precious Metals | GSTechnologies vs. Catalyst Media Group | GSTechnologies vs. Fulcrum Metals PLC | GSTechnologies vs. AMG Advanced Metallurgical |
| LBG Media vs. Caledonia Investments | LBG Media vs. Bankers Investment Trust | LBG Media vs. Diversified Energy | LBG Media vs. Livermore Investments 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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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