Correlation Between GBS Software and Corporate Office
Can any of the company-specific risk be diversified away by investing in both GBS Software and Corporate Office 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 Corporate Office 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 Corporate Office Properties, you can compare the effects of market volatilities on GBS Software and Corporate Office 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 Corporate Office. Check out your portfolio center. Please also check ongoing floating volatility patterns of GBS Software and Corporate Office.
Diversification Opportunities for GBS Software and Corporate Office
-0.02 | Correlation Coefficient |
Good diversification
The 3 months correlation between GBS and Corporate is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding GBS Software AG and Corporate Office Properties in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Corporate Office Pro 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 Corporate Office. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Corporate Office Pro has no effect on the direction of GBS Software i.e., GBS Software and Corporate Office go up and down completely randomly.
Pair Corralation between GBS Software and Corporate Office
Assuming the 90 days trading horizon GBS Software AG is expected to under-perform the Corporate Office. In addition to that, GBS Software is 1.6 times more volatile than Corporate Office Properties. It trades about -0.01 of its total potential returns per unit of risk. Corporate Office Properties is currently generating about 0.09 per unit of volatility. If you would invest 2,148 in Corporate Office Properties on October 16, 2024 and sell it today you would earn a total of 692.00 from holding Corporate Office Properties or generate 32.22% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
GBS Software AG vs. Corporate Office Properties
Performance |
| Timeline |
| GBS Software AG |
| Corporate Office Pro |
GBS Software and Corporate Office Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GBS Software and Corporate Office
The main advantage of trading using opposite GBS Software and Corporate Office positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GBS Software position performs unexpectedly, Corporate Office 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 Corporate Office will offset losses from the drop in Corporate Office's long position.| GBS Software vs. SEI INVESTMENTS | GBS Software vs. Perseus Mining Limited | GBS Software vs. Zijin Mining Group | GBS Software vs. GALENA MINING LTD |
| Corporate Office vs. CVW CLEANTECH INC | Corporate Office vs. Cleanaway Waste Management | Corporate Office vs. NORTHEAST UTILITIES | Corporate Office vs. Micron Technology |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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