Correlation Between GAZTRTECHNIUADR1/5EO01 and OAKTRSPECLENDNEW

Can any of the company-specific risk be diversified away by investing in both GAZTRTECHNIUADR1/5EO01 and OAKTRSPECLENDNEW 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 GAZTRTECHNIUADR1/5EO01 and OAKTRSPECLENDNEW into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between GAZTRTECHNIUADR15EO01 and OAKTRSPECLENDNEW, you can compare the effects of market volatilities on GAZTRTECHNIUADR1/5EO01 and OAKTRSPECLENDNEW 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 GAZTRTECHNIUADR1/5EO01 with a short position of OAKTRSPECLENDNEW. Check out your portfolio center. Please also check ongoing floating volatility patterns of GAZTRTECHNIUADR1/5EO01 and OAKTRSPECLENDNEW.

Diversification Opportunities for GAZTRTECHNIUADR1/5EO01 and OAKTRSPECLENDNEW

0.25

Correlation Coefficient

GAZTRTECHNIUADR1/5EO01  OAKTRSPECLENDNEW

Modest diversification

The 3 months correlation between GAZTRTECHNIUADR1/5EO01 and OAKTRSPECLENDNEW is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding GAZTRTECHNIUADR15EO01 and OAKTRSPECLENDNEW in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on OAKTRSPECLENDNEW and GAZTRTECHNIUADR1/5EO01 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 GAZTRTECHNIUADR15EO01 are associated (or correlated) with OAKTRSPECLENDNEW. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of OAKTRSPECLENDNEW has no effect on the direction of GAZTRTECHNIUADR1/5EO01 i.e., GAZTRTECHNIUADR1/5EO01 and OAKTRSPECLENDNEW go up and down completely randomly.

Pair Corralation between GAZTRTECHNIUADR1/5EO01 and OAKTRSPECLENDNEW

Assuming the 90 days trading horizon GAZTRTECHNIUADR15EO01 is expected to generate 1.09 times more return on investment than OAKTRSPECLENDNEW. However, GAZTRTECHNIUADR1/5EO01 is 1.09 times more volatile than OAKTRSPECLENDNEW. It trades about 0.0 of its potential returns per unit of risk. OAKTRSPECLENDNEW is currently generating about -0.04 per unit of risk. If you would invest  2,563  in GAZTRTECHNIUADR15EO01 on October 4, 2024 and sell it today you would lose (43.00) from holding GAZTRTECHNIUADR15EO01 or give up 1.68% of portfolio value over 90 days.

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

GAZTRTECHNIUADR15EO01  vs.  OAKTRSPECLENDNEW

GAZTRTECHNIUADR1/5EO01

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in GAZTRTECHNIUADR15EO01 are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable technical and fundamental indicators, GAZTRTECHNIUADR1/5EO01 is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

OAKTRSPECLENDNEW

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in OAKTRSPECLENDNEW are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable fundamental indicators, OAKTRSPECLENDNEW is not utilizing all of its potentials. The newest stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with GAZTRTECHNIUADR1/5EO01 and OAKTRSPECLENDNEW

The main advantage of trading using opposite GAZTRTECHNIUADR1/5EO01 and OAKTRSPECLENDNEW positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GAZTRTECHNIUADR1/5EO01 position performs unexpectedly, OAKTRSPECLENDNEW 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 OAKTRSPECLENDNEW will offset losses from the drop in OAKTRSPECLENDNEW's long position.

The idea behind GAZTRTECHNIUADR15EO01 and OAKTRSPECLENDNEW 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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.