Correlation Between G Capital and Multibax Public

Can any of the company-specific risk be diversified away by investing in both G Capital and Multibax Public 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 G Capital and Multibax Public into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between G Capital Public and Multibax Public, you can compare the effects of market volatilities on G Capital and Multibax Public 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 G Capital with a short position of Multibax Public. Check out your portfolio center. Please also check ongoing floating volatility patterns of G Capital and Multibax Public.

Diversification Opportunities for G Capital and Multibax Public

0.53

Correlation Coefficient

G Capital  Multibax Public

Very weak diversification

The 3 months correlation between GCAP and Multibax is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding G Capital Public and Multibax Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Multibax Public and G Capital 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 G Capital Public are associated (or correlated) with Multibax Public. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Multibax Public has no effect on the direction of G Capital i.e., G Capital and Multibax Public go up and down completely randomly.

Pair Corralation between G Capital and Multibax Public

Assuming the 90 days trading horizon G Capital Public is expected to under-perform the Multibax Public. In addition to that, G Capital is 2.0 times more volatile than Multibax Public. It trades about -0.11 of its total potential returns per unit of risk. Multibax Public is currently generating about -0.07 per unit of volatility. If you would invest  189.00  in Multibax Public on December 30, 2024 and sell it today you would lose (19.00) from holding Multibax Public or give up 10.05% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	98.41%
Values	Daily Returns

G Capital Public  vs.  Multibax Public

G Capital Public

Risk-Adjusted Performance

Very Weak

Over the last 90 days G Capital Public has generated negative risk-adjusted returns adding no value to investors with long positions. Despite conflicting performance in the last few months, the Stock's forward-looking signals remain quite persistent which may send shares a bit higher in April 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Multibax Public

Risk-Adjusted Performance

Very Weak

Over the last 90 days Multibax Public has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest conflicting performance, the Stock's forward-looking signals remain persistent and the latest mess on Wall Street may also be a sign of long-standing gains for the company institutional investors.

Pair Trading with G Capital and Multibax Public

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

The idea behind G Capital Public and Multibax Public 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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.