Correlation Between Gotham Master and Gotham Hedged

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

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

Diversification Opportunities for Gotham Master and Gotham Hedged

0.0

Correlation Coefficient

Gotham Master  Gotham Hedged

Pay attention - limited upside

The 3 months correlation between Gotham and Gotham is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Gotham Master Long and Gotham Hedged E in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gotham Hedged E and Gotham Master 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 Gotham Master Long are associated (or correlated) with Gotham Hedged. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gotham Hedged E has no effect on the direction of Gotham Master i.e., Gotham Master and Gotham Hedged go up and down completely randomly.

Pair Corralation between Gotham Master and Gotham Hedged

If you would invest  1,012  in Gotham Hedged E on October 12, 2024 and sell it today you would earn a total of  130.00  from holding Gotham Hedged E or generate 12.85% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Gotham Master Long  vs.  Gotham Hedged E

Gotham Master Long

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Gotham Master Long has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong technical and fundamental indicators, Gotham Master is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Gotham Hedged E

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Gotham Hedged E has generated negative risk-adjusted returns adding no value to fund investors. In spite of weak performance in the last few months, the Fund's fundamental indicators remain fairly strong which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long term up-swing for the fund investors.

Pair Trading with Gotham Master and Gotham Hedged

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

The idea behind Gotham Master Long and Gotham Hedged E 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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..