Correlation Between Ace Global and G4S Plc
Can any of the company-specific risk be diversified away by investing in both Ace Global and G4S Plc 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 Ace Global and G4S Plc into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ace Global Business and G4S Plc, you can compare the effects of market volatilities on Ace Global and G4S Plc 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 Ace Global with a short position of G4S Plc. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ace Global and G4S Plc.
Diversification Opportunities for Ace Global and G4S Plc
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Ace and G4S is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Ace Global Business and G4S Plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on G4S Plc and Ace Global 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 Ace Global Business are associated (or correlated) with G4S Plc. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of G4S Plc has no effect on the direction of Ace Global i.e., Ace Global and G4S Plc go up and down completely randomly.
Pair Corralation between Ace Global and G4S Plc
If you would invest 1,213 in Ace Global Business on February 3, 2024 and sell it today you would earn a total of 10.00 from holding Ace Global Business or generate 0.82% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Flat |
Strength | Insignificant |
Accuracy | 0.0% |
Values | Daily Returns |
Ace Global Business vs. G4S Plc
Performance |
Timeline |
Ace Global Business |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
OK
G4S Plc |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Ace Global and G4S Plc Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Ace Global and G4S Plc
The main advantage of trading using opposite Ace Global and G4S Plc positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ace Global position performs unexpectedly, G4S Plc 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 G4S Plc will offset losses from the drop in G4S Plc's long position.The idea behind Ace Global Business and G4S Plc 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.G4S Plc vs. Shake Shack | G4S Plc vs. Dominos Pizza | G4S Plc vs. Westrock Coffee | G4S Plc vs. Sphere Entertainment Co |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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