Correlation Between Electronics Mart and GACM Technologies

Specify exactly 2 symbols:
Can any of the company-specific risk be diversified away by investing in both Electronics Mart and GACM 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 Electronics Mart and GACM Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Electronics Mart India and GACM Technologies Limited, you can compare the effects of market volatilities on Electronics Mart and GACM 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 Electronics Mart with a short position of GACM Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Electronics Mart and GACM Technologies.

Diversification Opportunities for Electronics Mart and GACM Technologies

0.55
  Correlation Coefficient

Very weak diversification

The 3 months correlation between Electronics and GACM is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding Electronics Mart India and GACM Technologies Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GACM Technologies and Electronics Mart 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 Electronics Mart India are associated (or correlated) with GACM Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GACM Technologies has no effect on the direction of Electronics Mart i.e., Electronics Mart and GACM Technologies go up and down completely randomly.

Pair Corralation between Electronics Mart and GACM Technologies

Assuming the 90 days trading horizon Electronics Mart India is expected to under-perform the GACM Technologies. In addition to that, Electronics Mart is 1.03 times more volatile than GACM Technologies Limited. It trades about -0.13 of its total potential returns per unit of risk. GACM Technologies Limited is currently generating about -0.04 per unit of volatility. If you would invest  100.00  in GACM Technologies Limited on October 7, 2024 and sell it today you would lose (8.00) from holding GACM Technologies Limited or give up 8.0% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthWeak
Accuracy100.0%
ValuesDaily Returns

Electronics Mart India  vs.  GACM Technologies Limited

 Performance 
       Timeline  
Electronics Mart India 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Electronics Mart India has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in February 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.
GACM Technologies 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days GACM Technologies Limited has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound fundamental indicators, GACM Technologies is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

Electronics Mart and GACM Technologies Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Electronics Mart and GACM Technologies

The main advantage of trading using opposite Electronics Mart and GACM Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Electronics Mart position performs unexpectedly, GACM 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 GACM Technologies will offset losses from the drop in GACM Technologies' long position.
The idea behind Electronics Mart India and GACM Technologies Limited 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.

Other Complementary Tools

Sign In To Macroaxis
Sign in to explore Macroaxis' wealth optimization platform and fintech modules
Latest Portfolios
Quick portfolio dashboard that showcases your latest portfolios
Portfolio Manager
State of the art Portfolio Manager to monitor and improve performance of your invested capital
Sectors
List of equity sectors categorizing publicly traded companies based on their primary business activities
Theme Ratings
Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance