Correlation Between Guaranty Trust and Bloomsbury Publishing
Can any of the company-specific risk be diversified away by investing in both Guaranty Trust and Bloomsbury Publishing 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 Guaranty Trust and Bloomsbury Publishing into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Guaranty Trust Holding and Bloomsbury Publishing Plc, you can compare the effects of market volatilities on Guaranty Trust and Bloomsbury Publishing 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 Guaranty Trust with a short position of Bloomsbury Publishing. Check out your portfolio center. Please also check ongoing floating volatility patterns of Guaranty Trust and Bloomsbury Publishing.
Diversification Opportunities for Guaranty Trust and Bloomsbury Publishing
-0.72 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Guaranty and Bloomsbury is -0.72. Overlapping area represents the amount of risk that can be diversified away by holding Guaranty Trust Holding and Bloomsbury Publishing Plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bloomsbury Publishing Plc and Guaranty Trust 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 Guaranty Trust Holding are associated (or correlated) with Bloomsbury Publishing. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bloomsbury Publishing Plc has no effect on the direction of Guaranty Trust i.e., Guaranty Trust and Bloomsbury Publishing go up and down completely randomly.
Pair Corralation between Guaranty Trust and Bloomsbury Publishing
Assuming the 90 days trading horizon Guaranty Trust Holding is expected to generate 0.7 times more return on investment than Bloomsbury Publishing. However, Guaranty Trust Holding is 1.42 times less risky than Bloomsbury Publishing. It trades about 0.32 of its potential returns per unit of risk. Bloomsbury Publishing Plc is currently generating about -0.13 per unit of risk. If you would invest 179.00 in Guaranty Trust Holding on October 23, 2024 and sell it today you would earn a total of 14.00 from holding Guaranty Trust Holding or generate 7.82% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Guaranty Trust Holding vs. Bloomsbury Publishing Plc
Performance |
| Timeline |
| Guaranty Trust Holding |
| Bloomsbury Publishing Plc |
Guaranty Trust and Bloomsbury Publishing Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Guaranty Trust and Bloomsbury Publishing
The main advantage of trading using opposite Guaranty Trust and Bloomsbury Publishing positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Guaranty Trust position performs unexpectedly, Bloomsbury Publishing 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 Bloomsbury Publishing will offset losses from the drop in Bloomsbury Publishing's long position.| Guaranty Trust vs. Blackrock World Mining | Guaranty Trust vs. Lundin Mining Corp | Guaranty Trust vs. Travel Leisure Co | Guaranty Trust vs. First Majestic Silver |
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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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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