Correlation Between Twitter and Gan Shmuel
Can any of the company-specific risk be diversified away by investing in both Twitter and Gan Shmuel 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 Twitter and Gan Shmuel into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Twitter and Gan Shmuel, you can compare the effects of market volatilities on Twitter and Gan Shmuel 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 Twitter with a short position of Gan Shmuel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Twitter and Gan Shmuel.
Diversification Opportunities for Twitter and Gan Shmuel
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Twitter and Gan is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Twitter and Gan Shmuel in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gan Shmuel and Twitter 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 Twitter are associated (or correlated) with Gan Shmuel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gan Shmuel has no effect on the direction of Twitter i.e., Twitter and Gan Shmuel go up and down completely randomly.
Pair Corralation between Twitter and Gan Shmuel
Given the investment horizon of 90 days Twitter is expected to generate 1.6 times more return on investment than Gan Shmuel. However, Twitter is 1.6 times more volatile than Gan Shmuel. It trades about 0.13 of its potential returns per unit of risk. Gan Shmuel is currently generating about 0.06 per unit of risk. If you would invest 3,838 in Twitter on January 25, 2024 and sell it today you would earn a total of 1,532 from holding Twitter or generate 39.92% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 23.18% |
| Values | Daily Returns |
Twitter vs. Gan Shmuel
Performance |
| Timeline |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Gan Shmuel |
Twitter and Gan Shmuel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Twitter and Gan Shmuel
The main advantage of trading using opposite Twitter and Gan Shmuel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Twitter position performs unexpectedly, Gan Shmuel 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 Gan Shmuel will offset losses from the drop in Gan Shmuel's long position.| Twitter vs. Mid Atlantic Home Health | Twitter vs. Planet Fitness | Twitter vs. JBG SMITH Properties | Twitter vs. Bassett Furniture Industries |
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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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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