Correlation Between GAMC Old and Digital Transformation

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

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

Diversification Opportunities for GAMC Old and Digital Transformation

0.0

Correlation Coefficient

GAMC Old  Digital Transformation

Pay attention - limited upside

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

Pair Corralation between GAMC Old and Digital Transformation

If you would invest (100.00) in Digital Transformation Opportunities on December 19, 2024 and sell it today you would earn a total of  100.00  from holding Digital Transformation Opportunities or generate -100.0% return on investment over 90 days.

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

GAMC Old  vs.  Digital Transformation Opportu

GAMC Old

Risk-Adjusted Performance

Very Weak

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

Digital Transformation

Risk-Adjusted Performance

Very Weak

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

Pair Trading with GAMC Old and Digital Transformation

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

The idea behind GAMC Old and Digital Transformation Opportunities 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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.