Correlation Between Bank of Georgia and In Style

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

By analyzing existing cross correlation between Bank of Georgia and in Style Group, you can compare the effects of market volatilities on Bank of Georgia and In Style 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 Bank of Georgia with a short position of In Style. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank of Georgia and In Style.

Diversification Opportunities for Bank of Georgia and In Style

0.06

Correlation Coefficient

Bank of Georgia  In Style

Significant diversification

The 3 months correlation between Bank and ITS is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding Bank of Georgia and in Style Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on in Style Group and Bank of Georgia 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 Bank of Georgia are associated (or correlated) with In Style. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of in Style Group has no effect on the direction of Bank of Georgia i.e., Bank of Georgia and In Style go up and down completely randomly.

Pair Corralation between Bank of Georgia and In Style

Assuming the 90 days trading horizon Bank of Georgia is expected to generate 15.34 times less return on investment than In Style. But when comparing it to its historical volatility, Bank of Georgia is 21.67 times less risky than In Style. It trades about 0.07 of its potential returns per unit of risk. in Style Group is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest  630.00  in in Style Group on October 13, 2024 and sell it today you would earn a total of  399,370  from holding in Style Group or generate 63392.06% return on investment over 90 days.

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

Bank of Georgia  vs.  in Style Group

Bank of Georgia

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Bank of Georgia are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Bank of Georgia unveiled solid returns over the last few months and may actually be approaching a breakup point.

in Style Group

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in in Style Group are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound technical and fundamental indicators, In Style is not utilizing all of its potentials. The newest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Bank of Georgia and In Style

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

The idea behind Bank of Georgia and in Style Group 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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.