Correlation Between Manchester United and Guild Esports

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

By analyzing existing cross correlation between Manchester United and Guild Esports Plc, you can compare the effects of market volatilities on Manchester United and Guild Esports 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 Manchester United with a short position of Guild Esports. Check out your portfolio center. Please also check ongoing floating volatility patterns of Manchester United and Guild Esports.

Diversification Opportunities for Manchester United and Guild Esports

0.3

Correlation Coefficient

Manchester United  Guild Esports

Weak diversification

The 3 months correlation between Manchester and Guild is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding Manchester United and Guild Esports Plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guild Esports Plc and Manchester United 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 Manchester United are associated (or correlated) with Guild Esports. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Guild Esports Plc has no effect on the direction of Manchester United i.e., Manchester United and Guild Esports go up and down completely randomly.

Pair Corralation between Manchester United and Guild Esports

If you would invest  1,479  in Manchester United on February 8, 2024 and sell it today you would earn a total of  108.00  from holding Manchester United or generate 7.3% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	95.65%
Values	Daily Returns

Manchester United  vs.  Guild Esports Plc

Manchester United

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Manchester United has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in June 2024. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Guild Esports Plc

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Guild Esports Plc has generated negative risk-adjusted returns adding no value to investors with long positions. Despite uncertain performance in the last few months, the Stock's fundamental indicators remain nearly stable which may send shares a bit higher in June 2024. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with Manchester United and Guild Esports

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

The idea behind Manchester United and Guild Esports 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.

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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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.