Correlation Between Guild Esports and Bolloré SE
Can any of the company-specific risk be diversified away by investing in both Guild Esports and Bolloré SE 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 Guild Esports and Bolloré SE into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Guild Esports Plc and Bollor SE, you can compare the effects of market volatilities on Guild Esports and Bolloré SE 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 Guild Esports with a short position of Bolloré SE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Guild Esports and Bolloré SE.
Diversification Opportunities for Guild Esports and Bolloré SE
0.09 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Guild and Bolloré is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding Guild Esports Plc and Bollor SE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bolloré SE and Guild Esports 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 Guild Esports Plc are associated (or correlated) with Bolloré SE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bolloré SE has no effect on the direction of Guild Esports i.e., Guild Esports and Bolloré SE go up and down completely randomly.
Pair Corralation between Guild Esports and Bolloré SE
Assuming the 90 days horizon Guild Esports Plc is expected to generate 44.37 times more return on investment than Bolloré SE. However, Guild Esports is 44.37 times more volatile than Bollor SE. It trades about 0.08 of its potential returns per unit of risk. Bollor SE is currently generating about -0.02 per unit of risk. If you would invest 0.60 in Guild Esports Plc on November 4, 2024 and sell it today you would lose (0.13) from holding Guild Esports Plc or give up 21.67% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 99.2% |
| Values | Daily Returns |
Guild Esports Plc vs. Bollor SE
Performance |
| Timeline |
| Guild Esports Plc |
| Bolloré SE |
Guild Esports and Bolloré SE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Guild Esports and Bolloré SE
The main advantage of trading using opposite Guild Esports and Bolloré SE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Guild Esports position performs unexpectedly, Bolloré SE 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 Bolloré SE will offset losses from the drop in Bolloré SE's long position.| Guild Esports vs. Celtic plc | Guild Esports vs. Network Media Group | Guild Esports vs. OverActive Media Corp | Guild Esports vs. New Wave Holdings |
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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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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