Correlation Between GEVORKYAN and Colt CZ

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

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

Diversification Opportunities for GEVORKYAN and Colt CZ

-0.52

Correlation Coefficient

GEVORKYAN  Colt CZ

Excellent diversification

The 3 months correlation between GEVORKYAN and Colt is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding GEVORKYAN as and Colt CZ Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Colt CZ Group and GEVORKYAN 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 GEVORKYAN as are associated (or correlated) with Colt CZ. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Colt CZ Group has no effect on the direction of GEVORKYAN i.e., GEVORKYAN and Colt CZ go up and down completely randomly.

Pair Corralation between GEVORKYAN and Colt CZ

Assuming the 90 days trading horizon GEVORKYAN as is expected to under-perform the Colt CZ. But the stock apears to be less risky and, when comparing its historical volatility, GEVORKYAN as is 1.42 times less risky than Colt CZ. The stock trades about -0.22 of its potential returns per unit of risk. The Colt CZ Group is currently generating about 0.19 of returns per unit of risk over similar time horizon. If you would invest  70,900  in Colt CZ Group on November 28, 2024 and sell it today you would earn a total of  3,300  from holding Colt CZ Group or generate 4.65% return on investment over 90 days.

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

GEVORKYAN as  vs.  Colt CZ Group

GEVORKYAN as

Risk-Adjusted Performance

Very Weak

Over the last 90 days GEVORKYAN as has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, GEVORKYAN is not utilizing all of its potentials. The latest stock price agitation, may contribute to short-term losses for the retail investors.

Colt CZ Group

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Colt CZ Group are ranked lower than 21 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak technical and fundamental indicators, Colt CZ reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with GEVORKYAN and Colt CZ

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

The idea behind GEVORKYAN as and Colt CZ 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.