Correlation Between GACM Technologies and Bharti Airtel

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

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

Diversification Opportunities for GACM Technologies and Bharti Airtel

-0.31

Correlation Coefficient

GACM Technologies  Bharti Airtel

Very good diversification

The 3 months correlation between GACM and Bharti is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding GACM Technologies Limited and Bharti Airtel Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bharti Airtel Limited and GACM Technologies 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 GACM Technologies Limited are associated (or correlated) with Bharti Airtel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bharti Airtel Limited has no effect on the direction of GACM Technologies i.e., GACM Technologies and Bharti Airtel go up and down completely randomly.

Pair Corralation between GACM Technologies and Bharti Airtel

Assuming the 90 days trading horizon GACM Technologies Limited is expected to under-perform the Bharti Airtel. In addition to that, GACM Technologies is 1.37 times more volatile than Bharti Airtel Limited. It trades about -0.08 of its total potential returns per unit of risk. Bharti Airtel Limited is currently generating about 0.09 per unit of volatility. If you would invest  159,985  in Bharti Airtel Limited on December 27, 2024 and sell it today you would earn a total of  12,485  from holding Bharti Airtel Limited or generate 7.8% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.39%
Values	Daily Returns

GACM Technologies Limited  vs.  Bharti Airtel Limited

GACM Technologies

Risk-Adjusted Performance

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 latest weak performance, the Stock's fundamental indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the firm shareholders.

Bharti Airtel Limited

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Bharti Airtel Limited are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Bharti Airtel may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with GACM Technologies and Bharti Airtel

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

The idea behind GACM Technologies Limited and Bharti Airtel 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.

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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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.