Correlation Between COVER and Getty Images
Can any of the company-specific risk be diversified away by investing in both COVER and Getty Images 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 COVER and Getty Images into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between COVER and Getty Images Holdings, you can compare the effects of market volatilities on COVER and Getty Images 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 COVER with a short position of Getty Images. Check out your portfolio center. Please also check ongoing floating volatility patterns of COVER and Getty Images.
Diversification Opportunities for COVER and Getty Images
0.26 | Correlation Coefficient |
Modest diversification
The 3 months correlation between COVER and Getty is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding COVER and Getty Images Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Getty Images Holdings and COVER 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 COVER are associated (or correlated) with Getty Images. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Getty Images Holdings has no effect on the direction of COVER i.e., COVER and Getty Images go up and down completely randomly.
Pair Corralation between COVER and Getty Images
Assuming the 90 days horizon COVER is expected to generate 0.75 times more return on investment than Getty Images. However, COVER is 1.33 times less risky than Getty Images. It trades about 0.03 of its potential returns per unit of risk. Getty Images Holdings is currently generating about -0.08 per unit of risk. If you would invest 1,550 in COVER on December 1, 2024 and sell it today you would earn a total of 45.00 from holding COVER or generate 2.9% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 96.77% |
Values | Daily Returns |
COVER vs. Getty Images Holdings
Performance |
Timeline |
COVER |
Getty Images Holdings |
COVER and Getty Images Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with COVER and Getty Images
The main advantage of trading using opposite COVER and Getty Images positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if COVER position performs unexpectedly, Getty Images 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 Getty Images will offset losses from the drop in Getty Images' long position.COVER vs. The Hanover Insurance | COVER vs. Fidelity National Financial | COVER vs. Discover Financial Services | COVER vs. Siriuspoint |
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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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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