Correlation Between Workspace Group and GRIT Real
Can any of the company-specific risk be diversified away by investing in both Workspace Group and GRIT Real 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 Workspace Group and GRIT Real into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Workspace Group PLC and GRIT Real Estate, you can compare the effects of market volatilities on Workspace Group and GRIT Real 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 Workspace Group with a short position of GRIT Real. Check out your portfolio center. Please also check ongoing floating volatility patterns of Workspace Group and GRIT Real.
Diversification Opportunities for Workspace Group and GRIT Real
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Workspace and GRIT is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Workspace Group PLC and GRIT Real Estate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GRIT Real Estate and Workspace 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 Workspace Group PLC are associated (or correlated) with GRIT Real. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GRIT Real Estate has no effect on the direction of Workspace Group i.e., Workspace Group and GRIT Real go up and down completely randomly.
Pair Corralation between Workspace Group and GRIT Real
Assuming the 90 days trading horizon Workspace Group PLC is expected to generate 0.64 times more return on investment than GRIT Real. However, Workspace Group PLC is 1.57 times less risky than GRIT Real. It trades about -0.09 of its potential returns per unit of risk. GRIT Real Estate is currently generating about -0.21 per unit of risk. If you would invest 54,000 in Workspace Group PLC on September 14, 2024 and sell it today you would lose (1,700) from holding Workspace Group PLC or give up 3.15% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Workspace Group PLC vs. GRIT Real Estate
Performance |
| Timeline |
| Workspace Group PLC |
| GRIT Real Estate |
Workspace Group and GRIT Real Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Workspace Group and GRIT Real
The main advantage of trading using opposite Workspace Group and GRIT Real positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Workspace Group position performs unexpectedly, GRIT Real 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 GRIT Real will offset losses from the drop in GRIT Real's long position.| Workspace Group vs. Delta Air Lines | Workspace Group vs. Auto Trader Group | Workspace Group vs. Pentair PLC | Workspace Group vs. Vitec Software Group |
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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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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