Correlation Between GBT Technologies and Nagarro SE

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

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

Diversification Opportunities for GBT Technologies and Nagarro SE

-0.44

Correlation Coefficient

GBT Technologies  Nagarro SE

Very good diversification

The 3 months correlation between GBT and Nagarro is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding GBT Technologies and Nagarro SE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nagarro SE and GBT Technologies 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 GBT Technologies are associated (or correlated) with Nagarro SE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nagarro SE has no effect on the direction of GBT Technologies i.e., GBT Technologies and Nagarro SE go up and down completely randomly.

Pair Corralation between GBT Technologies and Nagarro SE

Given the investment horizon of 90 days GBT Technologies is expected to generate 83.32 times more return on investment than Nagarro SE. However, GBT Technologies is 83.32 times more volatile than Nagarro SE. It trades about 0.2 of its potential returns per unit of risk. Nagarro SE is currently generating about 0.02 per unit of risk. If you would invest  0.02  in GBT Technologies on December 27, 2024 and sell it today you would lose (0.01) from holding GBT Technologies or give up 50.0% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	98.36%
Values	Daily Returns

GBT Technologies  vs.  Nagarro SE

GBT Technologies

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in GBT Technologies are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. Despite fairly weak fundamental indicators, GBT Technologies demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Nagarro SE

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Nagarro SE are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable basic indicators, Nagarro SE is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with GBT Technologies and Nagarro SE

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

The idea behind GBT Technologies and Nagarro SE 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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.