Correlation Between GEE and Professional Diversity
Can any of the company-specific risk be diversified away by investing in both GEE and Professional Diversity 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 GEE and Professional Diversity into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GEE Group and Professional Diversity Network, you can compare the effects of market volatilities on GEE and Professional Diversity 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 GEE with a short position of Professional Diversity. Check out your portfolio center. Please also check ongoing floating volatility patterns of GEE and Professional Diversity.
Diversification Opportunities for GEE and Professional Diversity
0.01 | Correlation Coefficient |
Significant diversification
The 3 months correlation between GEE and Professional is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding GEE Group and Professional Diversity Network in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Professional Diversity and GEE 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 GEE Group are associated (or correlated) with Professional Diversity. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Professional Diversity has no effect on the direction of GEE i.e., GEE and Professional Diversity go up and down completely randomly.
Pair Corralation between GEE and Professional Diversity
Considering the 90-day investment horizon GEE Group is expected to generate 0.32 times more return on investment than Professional Diversity. However, GEE Group is 3.16 times less risky than Professional Diversity. It trades about -0.05 of its potential returns per unit of risk. Professional Diversity Network is currently generating about -0.08 per unit of risk. If you would invest 26.00 in GEE Group on August 29, 2024 and sell it today you would lose (1.00) from holding GEE Group or give up 3.85% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
GEE Group vs. Professional Diversity Network
Performance |
| Timeline |
| GEE Group |
| Professional Diversity |
GEE and Professional Diversity Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GEE and Professional Diversity
The main advantage of trading using opposite GEE and Professional Diversity positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GEE position performs unexpectedly, Professional Diversity 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 Professional Diversity will offset losses from the drop in Professional Diversity's long position.The idea behind GEE Group and Professional Diversity Network pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Professional Diversity vs. Staffing 360 Solutions | Professional Diversity vs. The Caldwell Partners | Professional Diversity vs. Trucept | Professional Diversity vs. Kelly Services A |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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