Correlation Between Manufatura and GX AI

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

By analyzing existing cross correlation between Manufatura de Brinquedos and GX AI TECH, you can compare the effects of market volatilities on Manufatura and GX AI 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 Manufatura with a short position of GX AI. Check out your portfolio center. Please also check ongoing floating volatility patterns of Manufatura and GX AI.

Diversification Opportunities for Manufatura and GX AI

0.0

Correlation Coefficient

Manufatura  GX AI

Pay attention - limited upside

The 3 months correlation between Manufatura and BAIQ39 is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Manufatura de Brinquedos and GX AI TECH in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GX AI TECH and Manufatura 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 Manufatura de Brinquedos are associated (or correlated) with GX AI. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GX AI TECH has no effect on the direction of Manufatura i.e., Manufatura and GX AI go up and down completely randomly.

Pair Corralation between Manufatura and GX AI

If you would invest  760.00  in Manufatura de Brinquedos on October 10, 2024 and sell it today you would earn a total of  0.00  from holding Manufatura de Brinquedos or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	94.74%
Values	Daily Returns

Manufatura de Brinquedos  vs.  GX AI TECH

Manufatura de Brinquedos

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Manufatura de Brinquedos has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Manufatura is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

GX AI TECH

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in GX AI TECH are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak forward indicators, GX AI sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Manufatura and GX AI

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

The idea behind Manufatura de Brinquedos and GX AI TECH 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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.