Correlation Between Santech Holdings and Gannett
Can any of the company-specific risk be diversified away by investing in both Santech Holdings and Gannett 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 Santech Holdings and Gannett into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Santech Holdings Limited and Gannett Co, you can compare the effects of market volatilities on Santech Holdings and Gannett 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 Santech Holdings with a short position of Gannett. Check out your portfolio center. Please also check ongoing floating volatility patterns of Santech Holdings and Gannett.
Diversification Opportunities for Santech Holdings and Gannett
0.1 | Correlation Coefficient |
Average diversification
The 3 months correlation between Santech and Gannett is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding Santech Holdings Limited and Gannett Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gannett and Santech Holdings 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 Santech Holdings Limited are associated (or correlated) with Gannett. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gannett has no effect on the direction of Santech Holdings i.e., Santech Holdings and Gannett go up and down completely randomly.
Pair Corralation between Santech Holdings and Gannett
Given the investment horizon of 90 days Santech Holdings Limited is expected to under-perform the Gannett. In addition to that, Santech Holdings is 2.35 times more volatile than Gannett Co. It trades about -0.45 of its total potential returns per unit of risk. Gannett Co is currently generating about -0.13 per unit of volatility. If you would invest 506.00 in Gannett Co on November 1, 2024 and sell it today you would lose (34.50) from holding Gannett Co or give up 6.82% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Santech Holdings Limited vs. Gannett Co
Performance |
| Timeline |
| Santech Holdings |
| Gannett |
Santech Holdings and Gannett Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Santech Holdings and Gannett
The main advantage of trading using opposite Santech Holdings and Gannett positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Santech Holdings position performs unexpectedly, Gannett 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 Gannett will offset losses from the drop in Gannett's long position.| Santech Holdings vs. Gannett Co | Santech Holdings vs. Youdao Inc | Santech Holdings vs. Vasta Platform | Santech Holdings vs. CTS Corporation |
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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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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