Correlation Between GSETNC and Indexco Limited

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

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

Diversification Opportunities for GSETNC and Indexco Limited

0.0

Correlation Coefficient

GSETNC  Indexco Limited

Pay attention - limited upside

The 3 months correlation between GSETNC and Indexco is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding GSETNC and Indexco Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Indexco Limited and GSETNC 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 GSETNC are associated (or correlated) with Indexco Limited. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Indexco Limited has no effect on the direction of GSETNC i.e., GSETNC and Indexco Limited go up and down completely randomly.

Pair Corralation between GSETNC and Indexco Limited

If you would invest  282,700  in GSETNC on September 12, 2024 and sell it today you would earn a total of  69,800  from holding GSETNC or generate 24.69% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

GSETNC  vs.  Indexco Limited

GSETNC

Risk-Adjusted Performance

19 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in GSETNC are ranked lower than 19 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, GSETNC sustained solid returns over the last few months and may actually be approaching a breakup point.

Indexco Limited

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Indexco Limited are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong fundamental indicators, Indexco Limited is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with GSETNC and Indexco Limited

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

The idea behind GSETNC and Indexco Limited 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 Commodity Directory module to find actively traded commodities issued by global exchanges.