Correlation Between GPT and Gaming
Can any of the company-specific risk be diversified away by investing in both GPT and Gaming 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 GPT and Gaming into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GPT Group and Gaming and Leisure, you can compare the effects of market volatilities on GPT and Gaming 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 GPT with a short position of Gaming. Check out your portfolio center. Please also check ongoing floating volatility patterns of GPT and Gaming.
Diversification Opportunities for GPT and Gaming
Average diversification
The 3 months correlation between GPT and Gaming is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding GPT Group and Gaming and Leisure in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gaming and Leisure and GPT 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 GPT Group are associated (or correlated) with Gaming. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gaming and Leisure has no effect on the direction of GPT i.e., GPT and Gaming go up and down completely randomly.
Pair Corralation between GPT and Gaming
Assuming the 90 days horizon GPT Group is expected to under-perform the Gaming. In addition to that, GPT is 3.12 times more volatile than Gaming and Leisure. It trades about -0.01 of its total potential returns per unit of risk. Gaming and Leisure is currently generating about 0.03 per unit of volatility. If you would invest 4,520 in Gaming and Leisure on December 26, 2024 and sell it today you would earn a total of 102.00 from holding Gaming and Leisure or generate 2.26% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
GPT Group vs. Gaming and Leisure
Performance |
Timeline |
GPT Group |
Gaming and Leisure |
GPT and Gaming Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with GPT and Gaming
The main advantage of trading using opposite GPT and Gaming positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GPT position performs unexpectedly, Gaming 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 Gaming will offset losses from the drop in Gaming's long position.GPT vs. De Grey Mining | GPT vs. SOUTHWEST AIRLINES | GPT vs. FIREWEED METALS P | GPT vs. Perseus Mining Limited |
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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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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