Correlation Between SPORT LISBOA and 5TH PLANET
Can any of the company-specific risk be diversified away by investing in both SPORT LISBOA and 5TH PLANET 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 SPORT LISBOA and 5TH PLANET into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SPORT LISBOA E and 5TH PLANET GAMES, you can compare the effects of market volatilities on SPORT LISBOA and 5TH PLANET 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 SPORT LISBOA with a short position of 5TH PLANET. Check out your portfolio center. Please also check ongoing floating volatility patterns of SPORT LISBOA and 5TH PLANET.
Diversification Opportunities for SPORT LISBOA and 5TH PLANET
0.19 | Correlation Coefficient |
Average diversification
The 3 months correlation between SPORT and 5TH is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding SPORT LISBOA E and 5TH PLANET GAMES in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on 5TH PLANET GAMES and SPORT LISBOA 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 SPORT LISBOA E are associated (or correlated) with 5TH PLANET. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of 5TH PLANET GAMES has no effect on the direction of SPORT LISBOA i.e., SPORT LISBOA and 5TH PLANET go up and down completely randomly.
Pair Corralation between SPORT LISBOA and 5TH PLANET
Assuming the 90 days horizon SPORT LISBOA E is expected to generate 0.32 times more return on investment than 5TH PLANET. However, SPORT LISBOA E is 3.13 times less risky than 5TH PLANET. It trades about -0.06 of its potential returns per unit of risk. 5TH PLANET GAMES is currently generating about -0.06 per unit of risk. If you would invest 317.00 in SPORT LISBOA E on September 22, 2024 and sell it today you would lose (11.00) from holding SPORT LISBOA E or give up 3.47% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
SPORT LISBOA E vs. 5TH PLANET GAMES
Performance |
| Timeline |
| SPORT LISBOA E |
| 5TH PLANET GAMES |
SPORT LISBOA and 5TH PLANET Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SPORT LISBOA and 5TH PLANET
The main advantage of trading using opposite SPORT LISBOA and 5TH PLANET positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SPORT LISBOA position performs unexpectedly, 5TH PLANET 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 5TH PLANET will offset losses from the drop in 5TH PLANET's long position.| SPORT LISBOA vs. The Walt Disney | SPORT LISBOA vs. The Walt Disney | SPORT LISBOA vs. Netflix | SPORT LISBOA vs. Charter Communications |
| 5TH PLANET vs. JD SPORTS FASH | 5TH PLANET vs. Australian Agricultural | 5TH PLANET vs. SPORT LISBOA E | 5TH PLANET vs. Nufarm Limited |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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