Correlation Between Kuehne Nagel and Gamma Communications
Can any of the company-specific risk be diversified away by investing in both Kuehne Nagel and Gamma Communications 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 Kuehne Nagel and Gamma Communications into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kuehne Nagel International and Gamma Communications plc, you can compare the effects of market volatilities on Kuehne Nagel and Gamma Communications 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 Kuehne Nagel with a short position of Gamma Communications. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kuehne Nagel and Gamma Communications.
Diversification Opportunities for Kuehne Nagel and Gamma Communications
0.56 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Kuehne and Gamma is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding Kuehne Nagel International and Gamma Communications plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gamma Communications plc and Kuehne Nagel 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 Kuehne Nagel International are associated (or correlated) with Gamma Communications. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gamma Communications plc has no effect on the direction of Kuehne Nagel i.e., Kuehne Nagel and Gamma Communications go up and down completely randomly.
Pair Corralation between Kuehne Nagel and Gamma Communications
Assuming the 90 days trading horizon Kuehne Nagel is expected to generate 1.73 times less return on investment than Gamma Communications. But when comparing it to its historical volatility, Kuehne Nagel International is 1.09 times less risky than Gamma Communications. It trades about 0.09 of its potential returns per unit of risk. Gamma Communications plc is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest 1,560 in Gamma Communications plc on November 18, 2024 and sell it today you would earn a total of 80.00 from holding Gamma Communications plc or generate 5.13% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kuehne Nagel International vs. Gamma Communications plc
Performance |
| Timeline |
| Kuehne Nagel Interna |
| Gamma Communications plc |
Kuehne Nagel and Gamma Communications Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kuehne Nagel and Gamma Communications
The main advantage of trading using opposite Kuehne Nagel and Gamma Communications positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kuehne Nagel position performs unexpectedly, Gamma Communications 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 Gamma Communications will offset losses from the drop in Gamma Communications' long position.| Kuehne Nagel vs. ZTO EXPRESS | Kuehne Nagel vs. NIKKON HOLDINGS TD | Kuehne Nagel vs. SENKO GROUP HOLDINGS | Kuehne Nagel vs. NTG Nordic Transport |
| Gamma Communications vs. Cogent Communications Holdings | Gamma Communications vs. TreeHouse Foods | Gamma Communications vs. Verizon Communications | Gamma Communications vs. Nomad Foods |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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