Correlation Between Gtn and Wam Leaders
Can any of the company-specific risk be diversified away by investing in both Gtn and Wam Leaders 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 Wam Leaders into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Gtn and Wam Leaders, you can compare the effects of market volatilities on Gtn and Wam Leaders 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 Wam Leaders. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gtn and Wam Leaders.
Diversification Opportunities for Gtn and Wam Leaders
-0.62 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Gtn and Wam is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding Gtn and Wam Leaders in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wam Leaders 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 Wam Leaders. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wam Leaders has no effect on the direction of Gtn i.e., Gtn and Wam Leaders go up and down completely randomly.
Pair Corralation between Gtn and Wam Leaders
Assuming the 90 days trading horizon Gtn is expected to under-perform the Wam Leaders. In addition to that, Gtn is 1.58 times more volatile than Wam Leaders. It trades about -0.47 of its total potential returns per unit of risk. Wam Leaders is currently generating about 0.0 per unit of volatility. If you would invest 125.00 in Wam Leaders on November 1, 2024 and sell it today you would earn a total of 0.00 from holding Wam Leaders or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Gtn vs. Wam Leaders
Performance |
| Timeline |
| Gtn |
| Wam Leaders |
Gtn and Wam Leaders Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gtn and Wam Leaders
The main advantage of trading using opposite Gtn and Wam Leaders positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gtn position performs unexpectedly, Wam Leaders 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 Wam Leaders will offset losses from the drop in Wam Leaders' long position.| Gtn vs. Black Rock Mining | Gtn vs. Australian Strategic Materials | Gtn vs. Aurelia Metals | Gtn vs. Dalaroo Metals |
| Wam Leaders vs. National Storage REIT | Wam Leaders vs. Truscott Mining Corp | Wam Leaders vs. Aeon Metals | Wam Leaders vs. Dug Technology |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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