Correlation Between GQG Partners and Bisalloy Steel

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

By analyzing existing cross correlation between GQG Partners DRC and Bisalloy Steel Group, you can compare the effects of market volatilities on GQG Partners and Bisalloy Steel 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 GQG Partners with a short position of Bisalloy Steel. Check out your portfolio center. Please also check ongoing floating volatility patterns of GQG Partners and Bisalloy Steel.

Diversification Opportunities for GQG Partners and Bisalloy Steel

-0.31

Correlation Coefficient

GQG Partners  Bisalloy Steel

Very good diversification

The 3 months correlation between GQG and Bisalloy is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding GQG Partners DRC and Bisalloy Steel Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bisalloy Steel Group and GQG Partners 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 GQG Partners DRC are associated (or correlated) with Bisalloy Steel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bisalloy Steel Group has no effect on the direction of GQG Partners i.e., GQG Partners and Bisalloy Steel go up and down completely randomly.

Pair Corralation between GQG Partners and Bisalloy Steel

Assuming the 90 days trading horizon GQG Partners DRC is expected to generate 0.74 times more return on investment than Bisalloy Steel. However, GQG Partners DRC is 1.35 times less risky than Bisalloy Steel. It trades about 0.34 of its potential returns per unit of risk. Bisalloy Steel Group is currently generating about -0.21 per unit of risk. If you would invest  205.00  in GQG Partners DRC on December 1, 2024 and sell it today you would earn a total of  29.00  from holding GQG Partners DRC or generate 14.15% return on investment over 90 days.

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

GQG Partners DRC  vs.  Bisalloy Steel Group

GQG Partners DRC

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in GQG Partners DRC are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain technical and fundamental indicators, GQG Partners unveiled solid returns over the last few months and may actually be approaching a breakup point.

Bisalloy Steel Group

Risk-Adjusted Performance

Very Weak

Over the last 90 days Bisalloy Steel Group has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest uncertain 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.

Pair Trading with GQG Partners and Bisalloy Steel

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

The idea behind GQG Partners DRC and Bisalloy Steel Group 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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..