Correlation Between Gtn and Seven West
Can any of the company-specific risk be diversified away by investing in both Gtn and Seven West 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 Gtn and Seven West into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Gtn and Seven West Media, you can compare the effects of market volatilities on Gtn and Seven West 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 Gtn with a short position of Seven West. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gtn and Seven West.
Diversification Opportunities for Gtn and Seven West
0.36 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Gtn and Seven is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding Gtn and Seven West Media in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Seven West Media and Gtn 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 Gtn are associated (or correlated) with Seven West. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Seven West Media has no effect on the direction of Gtn i.e., Gtn and Seven West go up and down completely randomly.
Pair Corralation between Gtn and Seven West
Assuming the 90 days trading horizon Gtn is expected to generate 1.05 times more return on investment than Seven West. However, Gtn is 1.05 times more volatile than Seven West Media. It trades about 0.03 of its potential returns per unit of risk. Seven West Media is currently generating about -0.05 per unit of risk. If you would invest 38.00 in Gtn on August 30, 2024 and sell it today you would earn a total of 8.00 from holding Gtn or generate 21.05% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Gtn vs. Seven West Media
Performance |
| Timeline |
| Gtn |
| Seven West Media |
Gtn and Seven West Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gtn and Seven West
The main advantage of trading using opposite Gtn and Seven West positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gtn position performs unexpectedly, Seven West 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 Seven West will offset losses from the drop in Seven West's long position.| Gtn vs. Retail Food Group | Gtn vs. Australian Unity Office | Gtn vs. Homeco Daily Needs | Gtn vs. IDP Education |
| Seven West vs. PVW Resources | Seven West vs. Woolworths | Seven West vs. Wesfarmers | Seven West vs. Coles 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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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