Correlation Between Globalfoundries and Gelteq Limited

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

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

Diversification Opportunities for Globalfoundries and Gelteq Limited

0.65

Correlation Coefficient

Globalfoundries  Gelteq Limited

Poor diversification

The 3 months correlation between Globalfoundries and Gelteq is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Globalfoundries and Gelteq Limited Ordinary in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gelteq Limited Ordinary and Globalfoundries 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 Globalfoundries are associated (or correlated) with Gelteq Limited. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gelteq Limited Ordinary has no effect on the direction of Globalfoundries i.e., Globalfoundries and Gelteq Limited go up and down completely randomly.

Pair Corralation between Globalfoundries and Gelteq Limited

Considering the 90-day investment horizon Globalfoundries is expected to generate 0.45 times more return on investment than Gelteq Limited. However, Globalfoundries is 2.24 times less risky than Gelteq Limited. It trades about -0.06 of its potential returns per unit of risk. Gelteq Limited Ordinary is currently generating about -0.19 per unit of risk. If you would invest  4,403  in Globalfoundries on December 23, 2024 and sell it today you would lose (540.00) from holding Globalfoundries or give up 12.26% of portfolio value over 90 days.

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

Globalfoundries  vs.  Gelteq Limited Ordinary

Globalfoundries

Risk-Adjusted Performance

Very Weak

Over the last 90 days Globalfoundries has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest inconsistent performance, the Stock's technical and fundamental indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Gelteq Limited Ordinary

Risk-Adjusted Performance

Very Weak

Over the last 90 days Gelteq Limited Ordinary has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's essential indicators remain comparatively stable which may send shares a bit higher in April 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with Globalfoundries and Gelteq Limited

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

The idea behind Globalfoundries and Gelteq Limited Ordinary 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.