Correlation Between Private Equity and Carlo Gavazzi

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

By analyzing existing cross correlation between Private Equity Holding and Carlo Gavazzi Holding, you can compare the effects of market volatilities on Private Equity and Carlo Gavazzi 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 Private Equity with a short position of Carlo Gavazzi. Check out your portfolio center. Please also check ongoing floating volatility patterns of Private Equity and Carlo Gavazzi.

Diversification Opportunities for Private Equity and Carlo Gavazzi

0.46

Correlation Coefficient

Private Equity  Carlo Gavazzi

Very weak diversification

The 3 months correlation between Private and Carlo is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding Private Equity Holding and Carlo Gavazzi Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Carlo Gavazzi Holding and Private Equity 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 Private Equity Holding are associated (or correlated) with Carlo Gavazzi. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Carlo Gavazzi Holding has no effect on the direction of Private Equity i.e., Private Equity and Carlo Gavazzi go up and down completely randomly.

Pair Corralation between Private Equity and Carlo Gavazzi

Assuming the 90 days trading horizon Private Equity Holding is expected to generate 0.5 times more return on investment than Carlo Gavazzi. However, Private Equity Holding is 2.0 times less risky than Carlo Gavazzi. It trades about -0.05 of its potential returns per unit of risk. Carlo Gavazzi Holding is currently generating about -0.09 per unit of risk. If you would invest  7,300  in Private Equity Holding on September 3, 2024 and sell it today you would lose (340.00) from holding Private Equity Holding or give up 4.66% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	84.38%
Values	Daily Returns

Private Equity Holding  vs.  Carlo Gavazzi Holding

Private Equity Holding

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Private Equity Holding has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, Private Equity is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Carlo Gavazzi Holding

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Carlo Gavazzi Holding has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of abnormal performance in the last few months, the Stock's basic indicators remain fairly stable which may send shares a bit higher in January 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

Pair Trading with Private Equity and Carlo Gavazzi

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

The idea behind Private Equity Holding and Carlo Gavazzi Holding 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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.