Correlation Between Homeco Daily and Gtn
Can any of the company-specific risk be diversified away by investing in both Homeco Daily and Gtn 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 Homeco Daily and Gtn into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Homeco Daily Needs and Gtn, you can compare the effects of market volatilities on Homeco Daily and Gtn 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 Homeco Daily with a short position of Gtn. Check out your portfolio center. Please also check ongoing floating volatility patterns of Homeco Daily and Gtn.
Diversification Opportunities for Homeco Daily and Gtn
0.37 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Homeco and Gtn is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding Homeco Daily Needs and Gtn in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gtn and Homeco Daily 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 Homeco Daily Needs are associated (or correlated) with Gtn. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gtn has no effect on the direction of Homeco Daily i.e., Homeco Daily and Gtn go up and down completely randomly.
Pair Corralation between Homeco Daily and Gtn
Assuming the 90 days trading horizon Homeco Daily Needs is expected to generate 0.64 times more return on investment than Gtn. However, Homeco Daily Needs is 1.56 times less risky than Gtn. It trades about 0.12 of its potential returns per unit of risk. Gtn is currently generating about -0.06 per unit of risk. If you would invest 123.00 in Homeco Daily Needs on August 30, 2024 and sell it today you would earn a total of 3.00 from holding Homeco Daily Needs or generate 2.44% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Homeco Daily Needs vs. Gtn
Performance |
| Timeline |
| Homeco Daily Needs |
| Gtn |
Homeco Daily and Gtn Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Homeco Daily and Gtn
The main advantage of trading using opposite Homeco Daily and Gtn positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Homeco Daily position performs unexpectedly, Gtn 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 Gtn will offset losses from the drop in Gtn's long position.| Homeco Daily vs. Scentre Group | Homeco Daily vs. Vicinity Centres Re | Homeco Daily vs. Charter Hall Retail | Homeco Daily vs. Cromwell Property Group |
| Gtn vs. Retail Food Group | Gtn vs. Australian Unity Office | Gtn vs. Homeco Daily Needs | Gtn vs. IDP Education |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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