Correlation Between GBS Software and COVIVIO HOTELS
Can any of the company-specific risk be diversified away by investing in both GBS Software and COVIVIO HOTELS 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 GBS Software and COVIVIO HOTELS into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GBS Software AG and COVIVIO HOTELS INH, you can compare the effects of market volatilities on GBS Software and COVIVIO HOTELS 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 GBS Software with a short position of COVIVIO HOTELS. Check out your portfolio center. Please also check ongoing floating volatility patterns of GBS Software and COVIVIO HOTELS.
Diversification Opportunities for GBS Software and COVIVIO HOTELS
0.52 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between GBS and COVIVIO is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding GBS Software AG and COVIVIO HOTELS INH in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on COVIVIO HOTELS INH and GBS Software 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 GBS Software AG are associated (or correlated) with COVIVIO HOTELS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of COVIVIO HOTELS INH has no effect on the direction of GBS Software i.e., GBS Software and COVIVIO HOTELS go up and down completely randomly.
Pair Corralation between GBS Software and COVIVIO HOTELS
Assuming the 90 days trading horizon GBS Software AG is expected to generate 2.35 times more return on investment than COVIVIO HOTELS. However, GBS Software is 2.35 times more volatile than COVIVIO HOTELS INH. It trades about 0.0 of its potential returns per unit of risk. COVIVIO HOTELS INH is currently generating about -0.32 per unit of risk. If you would invest 280.00 in GBS Software AG on November 7, 2024 and sell it today you would lose (2.00) from holding GBS Software AG or give up 0.71% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
GBS Software AG vs. COVIVIO HOTELS INH
Performance |
| Timeline |
| GBS Software AG |
| COVIVIO HOTELS INH |
GBS Software and COVIVIO HOTELS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GBS Software and COVIVIO HOTELS
The main advantage of trading using opposite GBS Software and COVIVIO HOTELS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GBS Software position performs unexpectedly, COVIVIO HOTELS 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 COVIVIO HOTELS will offset losses from the drop in COVIVIO HOTELS's long position.| GBS Software vs. SIVERS SEMICONDUCTORS AB | GBS Software vs. NorAm Drilling AS | GBS Software vs. Volkswagen AG | GBS Software vs. Darden Restaurants |
| COVIVIO HOTELS vs. Gol Intelligent Airlines | COVIVIO HOTELS vs. Fukuyama Transporting Co | COVIVIO HOTELS vs. Gaztransport Technigaz SA | COVIVIO HOTELS vs. Air Transport Services |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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