Correlation Between Unitech Computer and GCS Holdings

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

By analyzing existing cross correlation between Unitech Computer Co and GCS Holdings, you can compare the effects of market volatilities on Unitech Computer and GCS Holdings 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 Unitech Computer with a short position of GCS Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Unitech Computer and GCS Holdings.

Diversification Opportunities for Unitech Computer and GCS Holdings

-0.45

Correlation Coefficient

Unitech Computer  GCS Holdings

Very good diversification

The 3 months correlation between Unitech and GCS is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding Unitech Computer Co and GCS Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GCS Holdings and Unitech Computer 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 Unitech Computer Co are associated (or correlated) with GCS Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GCS Holdings has no effect on the direction of Unitech Computer i.e., Unitech Computer and GCS Holdings go up and down completely randomly.

Pair Corralation between Unitech Computer and GCS Holdings

Assuming the 90 days trading horizon Unitech Computer Co is expected to generate 0.13 times more return on investment than GCS Holdings. However, Unitech Computer Co is 7.62 times less risky than GCS Holdings. It trades about 0.15 of its potential returns per unit of risk. GCS Holdings is currently generating about -0.04 per unit of risk. If you would invest  3,710  in Unitech Computer Co on December 22, 2024 and sell it today you would earn a total of  215.00  from holding Unitech Computer Co or generate 5.8% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Unitech Computer Co  vs.  GCS Holdings

Unitech Computer

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Unitech Computer Co are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, Unitech Computer may actually be approaching a critical reversion point that can send shares even higher in April 2025.

GCS Holdings

Risk-Adjusted Performance

Very Weak

Over the last 90 days GCS Holdings 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 April 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

Pair Trading with Unitech Computer and GCS Holdings

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

The idea behind Unitech Computer Co and GCS Holdings 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.