Correlation Between BigBearai Holdings and GBT Technologies

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

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

Diversification Opportunities for BigBearai Holdings and GBT Technologies

-0.13

Correlation Coefficient

BigBearai Holdings  GBT Technologies

Good diversification

The 3 months correlation between BigBearai and GBT is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding BigBearai Holdings and GBT Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GBT Technologies and BigBearai Holdings 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 BigBearai Holdings are associated (or correlated) with GBT Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GBT Technologies has no effect on the direction of BigBearai Holdings i.e., BigBearai Holdings and GBT Technologies go up and down completely randomly.

Pair Corralation between BigBearai Holdings and GBT Technologies

Given the investment horizon of 90 days BigBearai Holdings is expected to generate 118.33 times less return on investment than GBT Technologies. But when comparing it to its historical volatility, BigBearai Holdings is 30.56 times less risky than GBT Technologies. It trades about 0.05 of its potential returns per unit of risk. GBT Technologies is currently generating about 0.21 of returns per unit of risk over similar time horizon. If you would invest  0.02  in GBT Technologies on September 14, 2024 and sell it today you would lose (0.01) from holding GBT Technologies or give up 50.0% of portfolio value over 90 days.

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

BigBearai Holdings  vs.  GBT Technologies

BigBearai Holdings

Risk-Adjusted Performance

10 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in BigBearai Holdings are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite fairly unsteady basic indicators, BigBearai Holdings demonstrated solid returns over the last few months and may actually be approaching a breakup point.

GBT Technologies

Risk-Adjusted Performance

17 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in GBT Technologies are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. Despite fairly weak fundamental indicators, GBT Technologies demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with BigBearai Holdings and GBT Technologies

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

The idea behind BigBearai Holdings and GBT Technologies 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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.