Correlation Between GDEV and GD Culture

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

By analyzing existing cross correlation between GDEV Inc and GD Culture Group, you can compare the effects of market volatilities on GDEV and GD Culture 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 GDEV with a short position of GD Culture. Check out your portfolio center. Please also check ongoing floating volatility patterns of GDEV and GD Culture.

Diversification Opportunities for GDEV and GD Culture

0.92

Correlation Coefficient

GDEV  GD Culture

Almost no diversification

The 3 months correlation between GDEV and GDC is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding GDEV Inc and GD Culture Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GD Culture Group and GDEV 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 GDEV Inc are associated (or correlated) with GD Culture. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GD Culture Group has no effect on the direction of GDEV i.e., GDEV and GD Culture go up and down completely randomly.

Pair Corralation between GDEV and GD Culture

Given the investment horizon of 90 days GDEV Inc is expected to under-perform the GD Culture. But the stock apears to be less risky and, when comparing its historical volatility, GDEV Inc is 1.01 times less risky than GD Culture. The stock trades about -0.01 of its potential returns per unit of risk. The GD Culture Group is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest  223.00  in GD Culture Group on December 1, 2024 and sell it today you would lose (31.00) from holding GD Culture Group or give up 13.9% of portfolio value over 90 days.

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

GDEV Inc  vs.  GD Culture Group

GDEV Inc

Risk-Adjusted Performance

Very Weak

Over the last 90 days GDEV Inc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable technical and fundamental indicators, GDEV is not utilizing all of its potentials. The current stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

GD Culture Group

Risk-Adjusted Performance

Very Weak

Over the last 90 days GD Culture Group has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound fundamental indicators, GD Culture is not utilizing all of its potentials. The recent stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with GDEV and GD Culture

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

The idea behind GDEV Inc and GD Culture Group 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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.