Correlation Between Castellum and GBT Technologies

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

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

Diversification Opportunities for Castellum and GBT Technologies

0.04

Correlation Coefficient

Castellum  GBT Technologies

Significant diversification

The 3 months correlation between Castellum and GBT is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding Castellum and GBT Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GBT Technologies and Castellum 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 Castellum 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 Castellum i.e., Castellum and GBT Technologies go up and down completely randomly.

Pair Corralation between Castellum and GBT Technologies

Considering the 90-day investment horizon Castellum is expected to generate 32.01 times less return on investment than GBT Technologies. But when comparing it to its historical volatility, Castellum is 24.44 times less risky than GBT Technologies. It trades about 0.22 of its potential returns per unit of risk. GBT Technologies is currently generating about 0.29 of returns per unit of risk over similar time horizon. If you would invest  0.01  in GBT Technologies on September 16, 2024 and sell it today you would earn a total of  0.01  from holding GBT Technologies or generate 100.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	95.45%
Values	Daily Returns

Castellum  vs.  GBT Technologies

Castellum

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Castellum are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of very weak basic indicators, Castellum displayed solid returns over the last few months and may actually be approaching a breakup point.

GBT Technologies

Risk-Adjusted Performance

18 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in GBT Technologies are ranked lower than 18 (%) 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 Castellum and GBT Technologies

The main advantage of trading using opposite Castellum and GBT Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Castellum 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 Castellum 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.

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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.