Correlation Between Gorilla Technology and CiT

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

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

Diversification Opportunities for Gorilla Technology and CiT

0.36

Correlation Coefficient

Gorilla Technology  CiT

Weak diversification

The 3 months correlation between Gorilla and CiT is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding Gorilla Technology Group and CiT Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CiT Inc and Gorilla Technology 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 Gorilla Technology Group are associated (or correlated) with CiT. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CiT Inc has no effect on the direction of Gorilla Technology i.e., Gorilla Technology and CiT go up and down completely randomly.

Pair Corralation between Gorilla Technology and CiT

Given the investment horizon of 90 days Gorilla Technology Group is expected to generate 5.71 times more return on investment than CiT. However, Gorilla Technology is 5.71 times more volatile than CiT Inc. It trades about 0.1 of its potential returns per unit of risk. CiT Inc is currently generating about 0.02 per unit of risk. If you would invest  1,888  in Gorilla Technology Group on December 27, 2024 and sell it today you would earn a total of  656.00  from holding Gorilla Technology Group or generate 34.75% return on investment over 90 days.

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

Gorilla Technology Group  vs.  CiT Inc

Gorilla Technology

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Gorilla Technology Group are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Even with relatively unfluctuating basic indicators, Gorilla Technology reported solid returns over the last few months and may actually be approaching a breakup point.

CiT Inc

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in CiT Inc are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, CiT is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Gorilla Technology and CiT

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

The idea behind Gorilla Technology Group and CiT Inc 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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.