Correlation Between GECCH and SAIHEAT

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

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

Diversification Opportunities for GECCH and SAIHEAT

0.3

Correlation Coefficient

GECCH  SAIHEAT

Weak diversification

The 3 months correlation between GECCH and SAIHEAT is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding GECCH and SAIHEAT Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SAIHEAT Limited and GECCH 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 GECCH are associated (or correlated) with SAIHEAT. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SAIHEAT Limited has no effect on the direction of GECCH i.e., GECCH and SAIHEAT go up and down completely randomly.

Pair Corralation between GECCH and SAIHEAT

Assuming the 90 days horizon GECCH is expected to generate 0.16 times more return on investment than SAIHEAT. However, GECCH is 6.35 times less risky than SAIHEAT. It trades about -0.04 of its potential returns per unit of risk. SAIHEAT Limited is currently generating about -0.02 per unit of risk. If you would invest  2,479  in GECCH on October 23, 2024 and sell it today you would lose (16.50) from holding GECCH or give up 0.67% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	36.84%
Values	Daily Returns

GECCH  vs.  SAIHEAT Limited

GECCH

Risk-Adjusted Performance

1 of 100

Very Weak

Compared to the overall equity markets, risk-adjusted returns on investments in GECCH are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite fairly strong fundamental indicators, GECCH is not utilizing all of its potentials. The latest stock price confusion, may contribute to short-horizon losses for the traders.

SAIHEAT Limited

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days SAIHEAT Limited has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's technical indicators remain fairly stable which may send shares a bit higher in February 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

Pair Trading with GECCH and SAIHEAT

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

The idea behind GECCH and SAIHEAT 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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.