Correlation Between Guild Esports and Network Media
Can any of the company-specific risk be diversified away by investing in both Guild Esports and Network Media 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 Network Media 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 Network Media Group, you can compare the effects of market volatilities on Guild Esports and Network Media 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 Network Media. Check out your portfolio center. Please also check ongoing floating volatility patterns of Guild Esports and Network Media.
Diversification Opportunities for Guild Esports and Network Media
-0.69 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Guild and Network is -0.69. Overlapping area represents the amount of risk that can be diversified away by holding Guild Esports Plc and Network Media Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Network Media Group 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 Network Media. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Network Media Group has no effect on the direction of Guild Esports i.e., Guild Esports and Network Media go up and down completely randomly.
Pair Corralation between Guild Esports and Network Media
Assuming the 90 days horizon Guild Esports Plc is expected to generate 1.45 times more return on investment than Network Media. However, Guild Esports is 1.45 times more volatile than Network Media Group. It trades about 0.03 of its potential returns per unit of risk. Network Media Group is currently generating about 0.0 per unit of risk. If you would invest 0.80 in Guild Esports Plc on August 29, 2024 and sell it today you would lose (0.03) from holding Guild Esports Plc or give up 3.75% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Guild Esports Plc vs. Network Media Group
Performance |
| Timeline |
| Guild Esports Plc |
| Network Media Group |
Guild Esports and Network Media Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Guild Esports and Network Media
The main advantage of trading using opposite Guild Esports and Network Media positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Guild Esports position performs unexpectedly, Network Media 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 Network Media will offset losses from the drop in Network Media's long position.| Guild Esports vs. ZoomerMedia Limited | Guild Esports vs. Celtic plc | Guild Esports vs. Network Media Group | Guild Esports vs. OverActive Media Corp |
| Network Media vs. Warner Music Group | Network Media vs. Live Nation Entertainment | Network Media vs. Atlanta Braves Holdings, | Network Media vs. Warner Bros Discovery |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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