Correlation Between Partners Group and GAM Holding
Can any of the company-specific risk be diversified away by investing in both Partners Group and GAM Holding 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 Partners Group and GAM Holding into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Partners Group Holding and GAM Holding AG, you can compare the effects of market volatilities on Partners Group and GAM Holding 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 Partners Group with a short position of GAM Holding. Check out your portfolio center. Please also check ongoing floating volatility patterns of Partners Group and GAM Holding.
Diversification Opportunities for Partners Group and GAM Holding
-0.38 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Partners and GAM is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding Partners Group Holding and GAM Holding AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GAM Holding AG and Partners Group 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 Partners Group Holding are associated (or correlated) with GAM Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GAM Holding AG has no effect on the direction of Partners Group i.e., Partners Group and GAM Holding go up and down completely randomly.
Pair Corralation between Partners Group and GAM Holding
Assuming the 90 days trading horizon Partners Group is expected to generate 1.22 times less return on investment than GAM Holding. But when comparing it to its historical volatility, Partners Group Holding is 2.3 times less risky than GAM Holding. It trades about 0.61 of its potential returns per unit of risk. GAM Holding AG is currently generating about 0.32 of returns per unit of risk over similar time horizon. If you would invest 8.31 in GAM Holding AG on October 26, 2024 and sell it today you would earn a total of 1.37 from holding GAM Holding AG or generate 16.49% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Partners Group Holding vs. GAM Holding AG
Performance |
| Timeline |
| Partners Group Holding |
| GAM Holding AG |
Partners Group and GAM Holding Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Partners Group and GAM Holding
The main advantage of trading using opposite Partners Group and GAM Holding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Partners Group position performs unexpectedly, GAM Holding 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 GAM Holding will offset losses from the drop in GAM Holding's long position.| Partners Group vs. Sika AG | Partners Group vs. Swiss Life Holding | Partners Group vs. Givaudan SA | Partners Group vs. Lonza Group AG |
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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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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