Correlation Between GACM Technologies and Page Industries

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

Diversification Opportunities for GACM Technologies and Page Industries

-0.59

Correlation Coefficient

GACM Technologies  Page Industries

Excellent diversification

The 3 months correlation between GACM and Page is -0.59. Overlapping area represents the amount of risk that can be diversified away by holding GACM Technologies Limited and Page Industries Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Page Industries 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 Page Industries. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Page Industries has no effect on the direction of GACM Technologies i.e., GACM Technologies and Page Industries go up and down completely randomly.

Pair Corralation between GACM Technologies and Page Industries

Assuming the 90 days trading horizon GACM Technologies Limited is expected to under-perform the Page Industries. In addition to that, GACM Technologies is 2.06 times more volatile than Page Industries Limited. It trades about -0.24 of its total potential returns per unit of risk. Page Industries Limited is currently generating about 0.12 per unit of volatility. If you would invest  4,082,839  in Page Industries Limited on September 5, 2024 and sell it today you would earn a total of  531,486  from holding Page Industries Limited or generate 13.02% return on investment over 90 days.

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

GACM Technologies Limited  vs.  Page Industries Limited

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 conflicting performance in the last few months, the Stock's fundamental indicators remain rather sound which may send shares a bit higher in January 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Page Industries

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Page Industries Limited are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of rather weak forward indicators, Page Industries exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with GACM Technologies and Page Industries

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

The idea behind GACM Technologies Limited and Page Industries 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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.