Correlation Between Infrastrutture Wireless and GSTechnologies

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

By analyzing existing cross correlation between Infrastrutture Wireless Italiane and GSTechnologies, you can compare the effects of market volatilities on Infrastrutture Wireless and GSTechnologies 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 Infrastrutture Wireless with a short position of GSTechnologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Infrastrutture Wireless and GSTechnologies.

Diversification Opportunities for Infrastrutture Wireless and GSTechnologies

-0.56

Correlation Coefficient

Infrastrutture Wireless  GSTechnologies

Excellent diversification

The 3 months correlation between Infrastrutture and GSTechnologies is -0.56. Overlapping area represents the amount of risk that can be diversified away by holding Infrastrutture Wireless Italia and GSTechnologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GSTechnologies and Infrastrutture Wireless 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 Infrastrutture Wireless Italiane are associated (or correlated) with GSTechnologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GSTechnologies has no effect on the direction of Infrastrutture Wireless i.e., Infrastrutture Wireless and GSTechnologies go up and down completely randomly.

Pair Corralation between Infrastrutture Wireless and GSTechnologies

Assuming the 90 days trading horizon Infrastrutture Wireless is expected to generate 35.49 times less return on investment than GSTechnologies. But when comparing it to its historical volatility, Infrastrutture Wireless Italiane is 7.88 times less risky than GSTechnologies. It trades about 0.02 of its potential returns per unit of risk. GSTechnologies is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest  50.00  in GSTechnologies on October 11, 2024 and sell it today you would earn a total of  260.00  from holding GSTechnologies or generate 520.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	99.8%
Values	Daily Returns

Infrastrutture Wireless Italia  vs.  GSTechnologies

Infrastrutture Wireless

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Infrastrutture Wireless Italiane has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest uncertain performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

GSTechnologies

Risk-Adjusted Performance

30 of 100

Strong

Compared to the overall equity markets, risk-adjusted returns on investments in GSTechnologies are ranked lower than 30 (%) of all global equities and portfolios over the last 90 days. In spite of rather uncertain technical and fundamental indicators, GSTechnologies exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Infrastrutture Wireless and GSTechnologies

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

The idea behind Infrastrutture Wireless Italiane and GSTechnologies 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.