Correlation Between Gecina SA and GEAR4MUSIC (HLDGS)

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Can any of the company-specific risk be diversified away by investing in both Gecina SA and GEAR4MUSIC (HLDGS) 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 Gecina SA and GEAR4MUSIC (HLDGS) into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Gecina SA and GEAR4MUSIC LS 10, you can compare the effects of market volatilities on Gecina SA and GEAR4MUSIC (HLDGS) 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 Gecina SA with a short position of GEAR4MUSIC (HLDGS). Check out your portfolio center. Please also check ongoing floating volatility patterns of Gecina SA and GEAR4MUSIC (HLDGS).

Diversification Opportunities for Gecina SA and GEAR4MUSIC (HLDGS)

0.28
  Correlation Coefficient

Modest diversification

The 3 months correlation between Gecina and GEAR4MUSIC is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding Gecina SA and GEAR4MUSIC LS 10 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GEAR4MUSIC (HLDGS) and Gecina SA 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 Gecina SA are associated (or correlated) with GEAR4MUSIC (HLDGS). Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GEAR4MUSIC (HLDGS) has no effect on the direction of Gecina SA i.e., Gecina SA and GEAR4MUSIC (HLDGS) go up and down completely randomly.

Pair Corralation between Gecina SA and GEAR4MUSIC (HLDGS)

Assuming the 90 days trading horizon Gecina SA is expected to under-perform the GEAR4MUSIC (HLDGS). But the stock apears to be less risky and, when comparing its historical volatility, Gecina SA is 2.21 times less risky than GEAR4MUSIC (HLDGS). The stock trades about 0.0 of its potential returns per unit of risk. The GEAR4MUSIC LS 10 is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest  158.00  in GEAR4MUSIC LS 10 on October 4, 2024 and sell it today you would earn a total of  39.00  from holding GEAR4MUSIC LS 10 or generate 24.68% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthVery Weak
Accuracy100.0%
ValuesDaily Returns

Gecina SA  vs.  GEAR4MUSIC LS 10

 Performance 
       Timeline  
Gecina SA 

Risk-Adjusted Performance

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Weak
 
Strong
Very Weak
Over the last 90 days Gecina SA has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.
GEAR4MUSIC (HLDGS) 

Risk-Adjusted Performance

1 of 100

 
Weak
 
Strong
Weak
Compared to the overall equity markets, risk-adjusted returns on investments in GEAR4MUSIC LS 10 are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable basic indicators, GEAR4MUSIC (HLDGS) is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Gecina SA and GEAR4MUSIC (HLDGS) Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Gecina SA and GEAR4MUSIC (HLDGS)

The main advantage of trading using opposite Gecina SA and GEAR4MUSIC (HLDGS) positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gecina SA position performs unexpectedly, GEAR4MUSIC (HLDGS) 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 GEAR4MUSIC (HLDGS) will offset losses from the drop in GEAR4MUSIC (HLDGS)'s long position.
The idea behind Gecina SA and GEAR4MUSIC LS 10 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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.

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