Correlation Between G8 EDUCATION and Retail Estates

Can any of the company-specific risk be diversified away by investing in both G8 EDUCATION and Retail Estates 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 G8 EDUCATION and Retail Estates into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between G8 EDUCATION and Retail Estates NV, you can compare the effects of market volatilities on G8 EDUCATION and Retail Estates 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 G8 EDUCATION with a short position of Retail Estates. Check out your portfolio center. Please also check ongoing floating volatility patterns of G8 EDUCATION and Retail Estates.

Diversification Opportunities for G8 EDUCATION and Retail Estates

-0.05

Correlation Coefficient

G8 EDUCATION  Retail Estates

Good diversification

The 3 months correlation between 3EAG and Retail is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding G8 EDUCATION and Retail Estates NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Retail Estates NV and G8 EDUCATION 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 G8 EDUCATION are associated (or correlated) with Retail Estates. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Retail Estates NV has no effect on the direction of G8 EDUCATION i.e., G8 EDUCATION and Retail Estates go up and down completely randomly.

Pair Corralation between G8 EDUCATION and Retail Estates

Assuming the 90 days trading horizon G8 EDUCATION is expected to generate 1.69 times more return on investment than Retail Estates. However, G8 EDUCATION is 1.69 times more volatile than Retail Estates NV. It trades about -0.08 of its potential returns per unit of risk. Retail Estates NV is currently generating about -0.24 per unit of risk. If you would invest  85.00  in G8 EDUCATION on September 4, 2024 and sell it today you would lose (5.00) from holding G8 EDUCATION or give up 5.88% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	97.67%
Values	Daily Returns

G8 EDUCATION  vs.  Retail Estates NV

G8 EDUCATION

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in G8 EDUCATION are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound technical and fundamental indicators, G8 EDUCATION is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Retail Estates NV

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Retail Estates NV has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest fragile performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Pair Trading with G8 EDUCATION and Retail Estates

The main advantage of trading using opposite G8 EDUCATION and Retail Estates positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if G8 EDUCATION position performs unexpectedly, Retail Estates 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 Retail Estates will offset losses from the drop in Retail Estates' long position.

The idea behind G8 EDUCATION and Retail Estates NV pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.