Correlation Between Multi Retail and GFC Green
Can any of the company-specific risk be diversified away by investing in both Multi Retail and GFC Green 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 Multi Retail and GFC Green into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Multi Retail Group and GFC Green Fields, you can compare the effects of market volatilities on Multi Retail and GFC Green 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 Multi Retail with a short position of GFC Green. Check out your portfolio center. Please also check ongoing floating volatility patterns of Multi Retail and GFC Green.
Diversification Opportunities for Multi Retail and GFC Green
-0.77 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Multi and GFC is -0.77. Overlapping area represents the amount of risk that can be diversified away by holding Multi Retail Group and GFC Green Fields in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GFC Green Fields and Multi Retail 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 Multi Retail Group are associated (or correlated) with GFC Green. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GFC Green Fields has no effect on the direction of Multi Retail i.e., Multi Retail and GFC Green go up and down completely randomly.
Pair Corralation between Multi Retail and GFC Green
Assuming the 90 days trading horizon Multi Retail Group is expected to generate 0.8 times more return on investment than GFC Green. However, Multi Retail Group is 1.24 times less risky than GFC Green. It trades about 0.36 of its potential returns per unit of risk. GFC Green Fields is currently generating about 0.01 per unit of risk. If you would invest 113,200 in Multi Retail Group on October 20, 2024 and sell it today you would earn a total of 14,500 from holding Multi Retail Group or generate 12.81% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Multi Retail Group vs. GFC Green Fields
Performance |
| Timeline |
| Multi Retail Group |
| GFC Green Fields |
Multi Retail and GFC Green Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Multi Retail and GFC Green
The main advantage of trading using opposite Multi Retail and GFC Green positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Multi Retail position performs unexpectedly, GFC Green 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 GFC Green will offset losses from the drop in GFC Green's long position.| Multi Retail vs. MEITAV INVESTMENTS HOUSE | Multi Retail vs. YD More Investments | Multi Retail vs. Arad Investment Industrial | Multi Retail vs. Azorim Investment Development |
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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 Transaction History module to view history of all your transactions and understand their impact on performance.
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