Correlation Between Gobarto SA and Pepco Group
Can any of the company-specific risk be diversified away by investing in both Gobarto SA and Pepco Group 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 Gobarto SA and Pepco Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Gobarto SA and Pepco Group BV, you can compare the effects of market volatilities on Gobarto SA and Pepco Group 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 Gobarto SA with a short position of Pepco Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gobarto SA and Pepco Group.
Diversification Opportunities for Gobarto SA and Pepco Group
-0.43 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Gobarto and Pepco is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding Gobarto SA and Pepco Group BV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pepco Group BV and Gobarto SA 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 Gobarto SA are associated (or correlated) with Pepco Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pepco Group BV has no effect on the direction of Gobarto SA i.e., Gobarto SA and Pepco Group go up and down completely randomly.
Pair Corralation between Gobarto SA and Pepco Group
Assuming the 90 days trading horizon Gobarto SA is expected to under-perform the Pepco Group. In addition to that, Gobarto SA is 1.62 times more volatile than Pepco Group BV. It trades about -0.03 of its total potential returns per unit of risk. Pepco Group BV is currently generating about -0.02 per unit of volatility. If you would invest 1,617 in Pepco Group BV on December 30, 2024 and sell it today you would lose (75.00) from holding Pepco Group BV or give up 4.64% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Gobarto SA vs. Pepco Group BV
Performance |
Timeline |
Gobarto SA |
Pepco Group BV |
Gobarto SA and Pepco Group Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Gobarto SA and Pepco Group
The main advantage of trading using opposite Gobarto SA and Pepco Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gobarto SA position performs unexpectedly, Pepco Group 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 Pepco Group will offset losses from the drop in Pepco Group's long position.Gobarto SA vs. Bank Millennium SA | Gobarto SA vs. mBank SA | Gobarto SA vs. PZ Cormay SA | Gobarto SA vs. Investment Friends Capital |
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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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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