Correlation Between GSD Holding and Bms Birlesik

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

By analyzing existing cross correlation between GSD Holding AS and Bms Birlesik Metal, you can compare the effects of market volatilities on GSD Holding and Bms Birlesik 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 GSD Holding with a short position of Bms Birlesik. Check out your portfolio center. Please also check ongoing floating volatility patterns of GSD Holding and Bms Birlesik.

Diversification Opportunities for GSD Holding and Bms Birlesik

0.87

Correlation Coefficient

GSD Holding  Bms Birlesik

Very poor diversification

The 3 months correlation between GSD and Bms is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding GSD Holding AS and Bms Birlesik Metal in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bms Birlesik Metal and GSD Holding 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 GSD Holding AS are associated (or correlated) with Bms Birlesik. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bms Birlesik Metal has no effect on the direction of GSD Holding i.e., GSD Holding and Bms Birlesik go up and down completely randomly.

Pair Corralation between GSD Holding and Bms Birlesik

Assuming the 90 days trading horizon GSD Holding is expected to generate 11.07 times less return on investment than Bms Birlesik. But when comparing it to its historical volatility, GSD Holding AS is 5.04 times less risky than Bms Birlesik. It trades about 0.02 of its potential returns per unit of risk. Bms Birlesik Metal is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest  1,001  in Bms Birlesik Metal on October 8, 2024 and sell it today you would earn a total of  1,909  from holding Bms Birlesik Metal or generate 190.71% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	99.19%
Values	Daily Returns

GSD Holding AS  vs.  Bms Birlesik Metal

GSD Holding AS

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in GSD Holding AS are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite fairly inconsistent forward indicators, GSD Holding demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Bms Birlesik Metal

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Bms Birlesik Metal are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite fairly inconsistent forward indicators, Bms Birlesik demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with GSD Holding and Bms Birlesik

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

The idea behind GSD Holding AS and Bms Birlesik Metal 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.