Correlation Between Great West and Investec Global
Can any of the company-specific risk be diversified away by investing in both Great West and Investec Global 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 Great West and Investec Global into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Great West Sp Mid and Investec Global Franchise, you can compare the effects of market volatilities on Great West and Investec Global 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 Great West with a short position of Investec Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Great West and Investec Global.
Diversification Opportunities for Great West and Investec Global
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Great and Investec is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Great West Sp Mid and Investec Global Franchise in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Investec Global Franchise and Great West 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 Great West Sp Mid are associated (or correlated) with Investec Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Investec Global Franchise has no effect on the direction of Great West i.e., Great West and Investec Global go up and down completely randomly.
Pair Corralation between Great West and Investec Global
Assuming the 90 days horizon Great West Sp Mid is expected to generate 1.64 times more return on investment than Investec Global. However, Great West is 1.64 times more volatile than Investec Global Franchise. It trades about 0.04 of its potential returns per unit of risk. Investec Global Franchise is currently generating about 0.04 per unit of risk. If you would invest 864.00 in Great West Sp Mid on October 22, 2024 and sell it today you would earn a total of 75.00 from holding Great West Sp Mid or generate 8.68% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Great West Sp Mid vs. Investec Global Franchise
Performance |
| Timeline |
| Great West Sp |
| Investec Global Franchise |
Great West and Investec Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Great West and Investec Global
The main advantage of trading using opposite Great West and Investec Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Great West position performs unexpectedly, Investec Global 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 Investec Global will offset losses from the drop in Investec Global's long position.| Great West vs. Aqr Sustainable Long Short | Great West vs. Alpine Ultra Short | Great West vs. Cmg Ultra Short | Great West vs. Rbc Short Duration |
| Investec Global vs. Franklin Emerging Market | Investec Global vs. Realestaterealreturn Strategy Fund | Investec Global vs. Boston Partners Emerging | Investec Global vs. Angel Oak Multi Strategy |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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