Correlation Between GelStat Corp and Kona Gold

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

By analyzing existing cross correlation between GelStat Corp and Kona Gold Solutions, you can compare the effects of market volatilities on GelStat Corp and Kona Gold 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 GelStat Corp with a short position of Kona Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of GelStat Corp and Kona Gold.

Diversification Opportunities for GelStat Corp and Kona Gold

0.21

Correlation Coefficient

GelStat Corp  Kona Gold

Modest diversification

The 3 months correlation between GelStat and Kona is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding GelStat Corp and Kona Gold Solutions in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kona Gold Solutions and GelStat Corp 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 GelStat Corp are associated (or correlated) with Kona Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kona Gold Solutions has no effect on the direction of GelStat Corp i.e., GelStat Corp and Kona Gold go up and down completely randomly.

Pair Corralation between GelStat Corp and Kona Gold

Given the investment horizon of 90 days GelStat Corp is expected to generate 12.4 times less return on investment than Kona Gold. But when comparing it to its historical volatility, GelStat Corp is 3.77 times less risky than Kona Gold. It trades about 0.05 of its potential returns per unit of risk. Kona Gold Solutions is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest  0.01  in Kona Gold Solutions on December 28, 2024 and sell it today you would earn a total of  0.00  from holding Kona Gold Solutions or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	96.77%
Values	Daily Returns

GelStat Corp  vs.  Kona Gold Solutions

GelStat Corp

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in GelStat Corp are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of rather conflicting basic indicators, GelStat Corp exhibited solid returns over the last few months and may actually be approaching a breakup point.

Kona Gold Solutions

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Kona Gold Solutions are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite nearly sluggish forward-looking signals, Kona Gold reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with GelStat Corp and Kona Gold

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

The idea behind GelStat Corp and Kona Gold Solutions 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.

Check out your portfolio center.

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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.