Correlation Between GomSpace Group and Zaptec AS

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

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

Diversification Opportunities for GomSpace Group and Zaptec AS

0.5

Correlation Coefficient

GomSpace Group  Zaptec AS

Very weak diversification

The 3 months correlation between GomSpace and Zaptec is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding GomSpace Group AB and Zaptec AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zaptec AS and GomSpace Group 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 GomSpace Group AB are associated (or correlated) with Zaptec AS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Zaptec AS has no effect on the direction of GomSpace Group i.e., GomSpace Group and Zaptec AS go up and down completely randomly.

Pair Corralation between GomSpace Group and Zaptec AS

Assuming the 90 days trading horizon GomSpace Group AB is expected to generate 0.8 times more return on investment than Zaptec AS. However, GomSpace Group AB is 1.25 times less risky than Zaptec AS. It trades about -0.05 of its potential returns per unit of risk. Zaptec AS is currently generating about -0.12 per unit of risk. If you would invest  517.00  in GomSpace Group AB on August 31, 2024 and sell it today you would lose (60.00) from holding GomSpace Group AB or give up 11.61% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	98.46%
Values	Daily Returns

GomSpace Group AB  vs.  Zaptec AS

GomSpace Group AB

Risk-Adjusted Performance

0 of 100

Very Weak

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

Zaptec AS

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Zaptec AS has generated negative risk-adjusted returns adding no value to investors with long positions. Despite conflicting performance in the last few months, the Stock's basic indicators remain quite persistent which may send shares a bit higher in December 2024. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Pair Trading with GomSpace Group and Zaptec AS

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

The idea behind GomSpace Group AB and Zaptec AS 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.