Correlation Between Sharetronic Data and GEM

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

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

Diversification Opportunities for Sharetronic Data and GEM

-0.12

Correlation Coefficient

Sharetronic Data  GEM

Good diversification

The 3 months correlation between Sharetronic and GEM is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding Sharetronic Data Technology and GEM Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GEM Co and Sharetronic Data 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 Sharetronic Data Technology are associated (or correlated) with GEM. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GEM Co has no effect on the direction of Sharetronic Data i.e., Sharetronic Data and GEM go up and down completely randomly.

Pair Corralation between Sharetronic Data and GEM

Assuming the 90 days trading horizon Sharetronic Data Technology is expected to generate 3.44 times more return on investment than GEM. However, Sharetronic Data is 3.44 times more volatile than GEM Co. It trades about -0.03 of its potential returns per unit of risk. GEM Co is currently generating about -0.41 per unit of risk. If you would invest  10,575  in Sharetronic Data Technology on October 8, 2024 and sell it today you would lose (416.00) from holding Sharetronic Data Technology or give up 3.93% of portfolio value over 90 days.

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

Sharetronic Data Technology  vs.  GEM Co

Sharetronic Data Tec

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Sharetronic Data Technology are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Sharetronic Data sustained solid returns over the last few months and may actually be approaching a breakup point.

GEM Co

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days GEM Co has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with Sharetronic Data and GEM

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

The idea behind Sharetronic Data Technology and GEM Co 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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.