Correlation Between Gobarto SA and GI Group

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

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

Diversification Opportunities for Gobarto SA and GI Group

-0.46

Correlation Coefficient

Gobarto SA  GI Group

Very good diversification

The 3 months correlation between Gobarto and GIG is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding Gobarto SA and GI Group Poland in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GI Group Poland and Gobarto 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 Gobarto SA are associated (or correlated) with GI Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GI Group Poland has no effect on the direction of Gobarto SA i.e., Gobarto SA and GI Group go up and down completely randomly.

Pair Corralation between Gobarto SA and GI Group

Assuming the 90 days trading horizon Gobarto SA is expected to generate 760.56 times less return on investment than GI Group. But when comparing it to its historical volatility, Gobarto SA is 1.74 times less risky than GI Group. It trades about 0.0 of its potential returns per unit of risk. GI Group Poland is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest  147.00  in GI Group Poland on December 4, 2024 and sell it today you would earn a total of  19.00  from holding GI Group Poland or generate 12.93% return on investment over 90 days.

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

Gobarto SA  vs.  GI Group Poland

Gobarto SA

Risk-Adjusted Performance

Very Weak

Over the last 90 days Gobarto SA has generated negative risk-adjusted returns adding no value to investors with long positions. Even with weak performance in the last few months, the Stock's basic indicators remain relatively invariable which may send shares a bit higher in April 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

GI Group Poland

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in GI Group Poland are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, GI Group reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Gobarto SA and GI Group

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

The idea behind Gobarto SA and GI Group Poland 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.