Correlation Between GACM Technologies and Emkay Global

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

Diversification Opportunities for GACM Technologies and Emkay Global

0.18

Correlation Coefficient

GACM Technologies  Emkay Global

Average diversification

The 3 months correlation between GACM and Emkay is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding GACM Technologies Limited and Emkay Global Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Emkay Global Financial 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 Emkay Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Emkay Global Financial has no effect on the direction of GACM Technologies i.e., GACM Technologies and Emkay Global go up and down completely randomly.

Pair Corralation between GACM Technologies and Emkay Global

Assuming the 90 days trading horizon GACM Technologies Limited is expected to under-perform the Emkay Global. In addition to that, GACM Technologies is 1.03 times more volatile than Emkay Global Financial. It trades about -0.19 of its total potential returns per unit of risk. Emkay Global Financial is currently generating about 0.1 per unit of volatility. If you would invest  7,100  in Emkay Global Financial on October 24, 2024 and sell it today you would earn a total of  21,435  from holding Emkay Global Financial or generate 301.9% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	78.51%
Values	Daily Returns

GACM Technologies Limited  vs.  Emkay Global Financial

GACM Technologies

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in GACM Technologies Limited are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of rather inconsistent fundamental indicators, GACM Technologies exhibited solid returns over the last few months and may actually be approaching a breakup point.

Emkay Global Financial

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Emkay Global Financial are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of very weak forward-looking signals, Emkay Global may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with GACM Technologies and Emkay Global

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

The idea behind GACM Technologies Limited and Emkay Global Financial 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.