Correlation Between GSTechnologies and Global Opportunities

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

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

Diversification Opportunities for GSTechnologies and Global Opportunities

0.0

Correlation Coefficient

GSTechnologies  Global Opportunities

Pay attention - limited upside

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

Pair Corralation between GSTechnologies and Global Opportunities

If you would invest  73.00  in GSTechnologies on October 22, 2024 and sell it today you would earn a total of  142.00  from holding GSTechnologies or generate 194.52% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	1.61%
Values	Daily Returns

GSTechnologies  vs.  Global Opportunities Trust

GSTechnologies

Risk-Adjusted Performance

19 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in GSTechnologies are ranked lower than 19 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady technical and fundamental indicators, GSTechnologies exhibited solid returns over the last few months and may actually be approaching a breakup point.

Global Opportunities

Risk-Adjusted Performance

0 of 100

Insignificant

Over the last 90 days Global Opportunities Trust has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound technical and fundamental indicators, Global Opportunities is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with GSTechnologies and Global Opportunities

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

The idea behind GSTechnologies and Global Opportunities Trust 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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.