Correlation Between GFPT Public and Fine Metal

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

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

Diversification Opportunities for GFPT Public and Fine Metal

0.59

Correlation Coefficient

GFPT Public  Fine Metal

Very weak diversification

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

Pair Corralation between GFPT Public and Fine Metal

Assuming the 90 days trading horizon GFPT Public is expected to generate 1.13 times more return on investment than Fine Metal. However, GFPT Public is 1.13 times more volatile than Fine Metal Technologies. It trades about -0.02 of its potential returns per unit of risk. Fine Metal Technologies is currently generating about -0.09 per unit of risk. If you would invest  932.00  in GFPT Public on December 29, 2024 and sell it today you would lose (62.00) from holding GFPT Public or give up 6.65% of portfolio value over 90 days.

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

GFPT Public  vs.  Fine Metal Technologies

GFPT Public

Risk-Adjusted Performance

Very Weak

Over the last 90 days GFPT Public has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent forward-looking signals, GFPT Public is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

Fine Metal Technologies

Risk-Adjusted Performance

Very Weak

Over the last 90 days Fine Metal Technologies 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 basic indicators 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.

Pair Trading with GFPT Public and Fine Metal

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

The idea behind GFPT Public and Fine Metal Technologies 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.

Check out your portfolio center.

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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.