Correlation Between G2D Investments and Bank Of

Can any of the company-specific risk be diversified away by investing in both G2D Investments and Bank Of 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 G2D Investments and Bank Of into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between G2D Investments and The Bank of, you can compare the effects of market volatilities on G2D Investments and Bank Of 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 G2D Investments with a short position of Bank Of. Check out your portfolio center. Please also check ongoing floating volatility patterns of G2D Investments and Bank Of.

Diversification Opportunities for G2D Investments and Bank Of

-0.03

Correlation Coefficient

G2D Investments  Bank Of

Good diversification

The 3 months correlation between G2D and Bank is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding G2D Investments and The Bank of in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on The Bank and G2D Investments 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 G2D Investments are associated (or correlated) with Bank Of. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of The Bank has no effect on the direction of G2D Investments i.e., G2D Investments and Bank Of go up and down completely randomly.

Pair Corralation between G2D Investments and Bank Of

Assuming the 90 days trading horizon G2D Investments is expected to under-perform the Bank Of. In addition to that, G2D Investments is 1.02 times more volatile than The Bank of. It trades about -0.07 of its total potential returns per unit of risk. The Bank of is currently generating about 0.01 per unit of volatility. If you would invest  47,485  in The Bank of on December 30, 2024 and sell it today you would earn a total of  94.00  from holding The Bank of or generate 0.2% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	91.94%
Values	Daily Returns

G2D Investments  vs.  The Bank of

G2D Investments

Risk-Adjusted Performance

Very Weak

Over the last 90 days G2D Investments has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's fundamental indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

The Bank

Risk-Adjusted Performance

Very Weak

Over the last 90 days The Bank of has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Bank Of is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with G2D Investments and Bank Of

The main advantage of trading using opposite G2D Investments and Bank Of positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if G2D Investments position performs unexpectedly, Bank Of 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 Bank Of will offset losses from the drop in Bank Of's long position.

The idea behind G2D Investments and The Bank of 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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.