Correlation Between Gray Television and Minerals Technologies
Can any of the company-specific risk be diversified away by investing in both Gray Television and Minerals Technologies 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 Gray Television and Minerals Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Gray Television and Minerals Technologies, you can compare the effects of market volatilities on Gray Television and Minerals Technologies 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 Gray Television with a short position of Minerals Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gray Television and Minerals Technologies.
Diversification Opportunities for Gray Television and Minerals Technologies
-0.27 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Gray and Minerals is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding Gray Television and Minerals Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Minerals Technologies and Gray Television 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 Gray Television are associated (or correlated) with Minerals Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Minerals Technologies has no effect on the direction of Gray Television i.e., Gray Television and Minerals Technologies go up and down completely randomly.
Pair Corralation between Gray Television and Minerals Technologies
Given the investment horizon of 90 days Gray Television is expected to generate 3.72 times more return on investment than Minerals Technologies. However, Gray Television is 3.72 times more volatile than Minerals Technologies. It trades about 0.02 of its potential returns per unit of risk. Minerals Technologies is currently generating about 0.07 per unit of risk. If you would invest 835.00 in Gray Television on September 4, 2024 and sell it today you would lose (98.00) from holding Gray Television or give up 11.74% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 98.79% |
| Values | Daily Returns |
Gray Television vs. Minerals Technologies
Performance |
| Timeline |
| Gray Television |
| Minerals Technologies |
Gray Television and Minerals Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gray Television and Minerals Technologies
The main advantage of trading using opposite Gray Television and Minerals Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gray Television position performs unexpectedly, Minerals Technologies 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 Minerals Technologies will offset losses from the drop in Minerals Technologies' long position.| Gray Television vs. Harmony Gold Mining | Gray Television vs. Vindicator Silver Lead Mining | Gray Television vs. Boston Omaha Corp | Gray Television vs. Stagwell |
| Minerals Technologies vs. Innospec | Minerals Technologies vs. Oil Dri | Minerals Technologies vs. H B Fuller | Minerals Technologies vs. Quaker Chemical |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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