Correlation Between Gobarto SA and Notoria

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

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

Diversification Opportunities for Gobarto SA and Notoria

-0.7

Correlation Coefficient

Gobarto SA  Notoria

Excellent diversification

The 3 months correlation between Gobarto and Notoria is -0.7. Overlapping area represents the amount of risk that can be diversified away by holding Gobarto SA and Notoria in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Notoria 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 Notoria. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Notoria has no effect on the direction of Gobarto SA i.e., Gobarto SA and Notoria go up and down completely randomly.

Pair Corralation between Gobarto SA and Notoria

Assuming the 90 days trading horizon Gobarto SA is expected to under-perform the Notoria. In addition to that, Gobarto SA is 2.59 times more volatile than Notoria. It trades about 0.0 of its total potential returns per unit of risk. Notoria is currently generating about 0.12 per unit of volatility. If you would invest  830.00  in Notoria on December 23, 2024 and sell it today you would earn a total of  20.00  from holding Notoria or generate 2.41% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	23.33%
Values	Daily Returns

Gobarto SA  vs.  Notoria

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 relatively invariable basic indicators, Gobarto SA is not utilizing all of its potentials. The latest stock price agitation, may contribute to short-term losses for the retail investors.

Notoria

Risk-Adjusted Performance

OK

Over the last 90 days Notoria has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively weak basic indicators, Notoria may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Gobarto SA and Notoria

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

The idea behind Gobarto SA and Notoria 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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.