Correlation Between Grupo Sports and EBay
Can any of the company-specific risk be diversified away by investing in both Grupo Sports and EBay 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 Grupo Sports and EBay into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Grupo Sports World and eBay Inc, you can compare the effects of market volatilities on Grupo Sports and EBay 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 Grupo Sports with a short position of EBay. Check out your portfolio center. Please also check ongoing floating volatility patterns of Grupo Sports and EBay.
Diversification Opportunities for Grupo Sports and EBay
0.36 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Grupo and EBay is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding Grupo Sports World and eBay Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on eBay Inc and Grupo Sports 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 Grupo Sports World are associated (or correlated) with EBay. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of eBay Inc has no effect on the direction of Grupo Sports i.e., Grupo Sports and EBay go up and down completely randomly.
Pair Corralation between Grupo Sports and EBay
Assuming the 90 days trading horizon Grupo Sports World is expected to generate 1.23 times more return on investment than EBay. However, Grupo Sports is 1.23 times more volatile than eBay Inc. It trades about 0.16 of its potential returns per unit of risk. eBay Inc is currently generating about 0.02 per unit of risk. If you would invest 558.00 in Grupo Sports World on September 13, 2024 and sell it today you would earn a total of 82.00 from holding Grupo Sports World or generate 14.7% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 97.67% |
| Values | Daily Returns |
Grupo Sports World vs. eBay Inc
Performance |
| Timeline |
| Grupo Sports World |
| eBay Inc |
Grupo Sports and EBay Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Grupo Sports and EBay
The main advantage of trading using opposite Grupo Sports and EBay positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Grupo Sports position performs unexpectedly, EBay 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 EBay will offset losses from the drop in EBay's long position.| Grupo Sports vs. Applied Materials | Grupo Sports vs. Verizon Communications | Grupo Sports vs. First Republic Bank | Grupo Sports vs. Lloyds Banking Group |
| EBay vs. GMxico Transportes SAB | EBay vs. Genworth Financial | EBay vs. Applied Materials | EBay vs. Grupo Sports World |
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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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