Correlation Between G Bits and RoadMain T

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

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

Diversification Opportunities for G Bits and RoadMain T

-0.19

Correlation Coefficient

G Bits  RoadMain T

Good diversification

The 3 months correlation between 603444 and RoadMain is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding G bits Network Technology and RoadMain T Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on RoadMain T and G Bits 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 G bits Network Technology are associated (or correlated) with RoadMain T. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of RoadMain T has no effect on the direction of G Bits i.e., G Bits and RoadMain T go up and down completely randomly.

Pair Corralation between G Bits and RoadMain T

Assuming the 90 days trading horizon G bits Network Technology is expected to under-perform the RoadMain T. But the stock apears to be less risky and, when comparing its historical volatility, G bits Network Technology is 1.19 times less risky than RoadMain T. The stock trades about -0.02 of its potential returns per unit of risk. The RoadMain T Co is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest  2,388  in RoadMain T Co on October 9, 2024 and sell it today you would earn a total of  346.00  from holding RoadMain T Co or generate 14.49% return on investment over 90 days.

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

G bits Network Technology  vs.  RoadMain T Co

G bits Network

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days G bits Network Technology has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

RoadMain T

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days RoadMain T Co has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, RoadMain T is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with G Bits and RoadMain T

The main advantage of trading using opposite G Bits and RoadMain T positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if G Bits position performs unexpectedly, RoadMain T 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 RoadMain T will offset losses from the drop in RoadMain T's long position.

The idea behind G bits Network Technology and RoadMain T 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.

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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.