Correlation Between GACM Technologies and DJ Mediaprint

Can any of the company-specific risk be diversified away by investing in both GACM Technologies and DJ Mediaprint 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 DJ Mediaprint 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 DJ Mediaprint Logistics, you can compare the effects of market volatilities on GACM Technologies and DJ Mediaprint 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 DJ Mediaprint. Check out your portfolio center. Please also check ongoing floating volatility patterns of GACM Technologies and DJ Mediaprint.

Diversification Opportunities for GACM Technologies and DJ Mediaprint

-0.05

Correlation Coefficient

GACM Technologies  DJ Mediaprint

Good diversification

The 3 months correlation between GACM and DJML is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding GACM Technologies Limited and DJ Mediaprint Logistics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DJ Mediaprint Logistics 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 DJ Mediaprint. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DJ Mediaprint Logistics has no effect on the direction of GACM Technologies i.e., GACM Technologies and DJ Mediaprint go up and down completely randomly.

Pair Corralation between GACM Technologies and DJ Mediaprint

Assuming the 90 days trading horizon GACM Technologies is expected to generate 3.46 times less return on investment than DJ Mediaprint. But when comparing it to its historical volatility, GACM Technologies Limited is 1.92 times less risky than DJ Mediaprint. It trades about 0.36 of its potential returns per unit of risk. DJ Mediaprint Logistics is currently generating about 0.65 of returns per unit of risk over similar time horizon. If you would invest  12,156  in DJ Mediaprint Logistics on September 23, 2024 and sell it today you would earn a total of  7,638  from holding DJ Mediaprint Logistics or generate 62.83% return on investment over 90 days.

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

GACM Technologies Limited  vs.  DJ Mediaprint Logistics

GACM Technologies

Risk-Adjusted Performance

0 of 100

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 conflicting 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.

DJ Mediaprint Logistics

Risk-Adjusted Performance

23 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in DJ Mediaprint Logistics are ranked lower than 23 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak basic indicators, DJ Mediaprint unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with GACM Technologies and DJ Mediaprint

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

The idea behind GACM Technologies Limited and DJ Mediaprint Logistics 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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.