Correlation Between Getty Images and COVER

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

By analyzing existing cross correlation between Getty Images Holdings and COVER, you can compare the effects of market volatilities on Getty Images and COVER 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 Getty Images with a short position of COVER. Check out your portfolio center. Please also check ongoing floating volatility patterns of Getty Images and COVER.

Diversification Opportunities for Getty Images and COVER

0.06

Correlation Coefficient

Getty Images  COVER

Significant diversification

The 3 months correlation between Getty and COVER is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding Getty Images Holdings and COVER in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on COVER and Getty Images 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 Getty Images Holdings are associated (or correlated) with COVER. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of COVER has no effect on the direction of Getty Images i.e., Getty Images and COVER go up and down completely randomly.

Pair Corralation between Getty Images and COVER

Given the investment horizon of 90 days Getty Images is expected to generate 188.38 times less return on investment than COVER. In addition to that, Getty Images is 1.29 times more volatile than COVER. It trades about 0.0 of its total potential returns per unit of risk. COVER is currently generating about 0.07 per unit of volatility. If you would invest  1,668  in COVER on December 28, 2024 and sell it today you would earn a total of  240.00  from holding COVER or generate 14.39% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	96.77%
Values	Daily Returns

Getty Images Holdings  vs.  COVER

Getty Images Holdings

Risk-Adjusted Performance

Very Weak

Over the last 90 days Getty Images Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong basic indicators, Getty Images is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

COVER

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in COVER are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak fundamental indicators, COVER reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Getty Images and COVER

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

The idea behind Getty Images Holdings and COVER 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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.