Correlation Between GBT Technologies and POSaBIT Systems

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

By analyzing existing cross correlation between GBT Technologies and POSaBIT Systems Corp, you can compare the effects of market volatilities on GBT Technologies and POSaBIT Systems 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 POSaBIT Systems. Check out your portfolio center. Please also check ongoing floating volatility patterns of GBT Technologies and POSaBIT Systems.

Diversification Opportunities for GBT Technologies and POSaBIT Systems

-0.09

Correlation Coefficient

GBT Technologies  POSaBIT Systems

Good diversification

The 3 months correlation between GBT and POSaBIT is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding GBT Technologies and POSaBIT Systems Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on POSaBIT Systems Corp 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 POSaBIT Systems. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of POSaBIT Systems Corp has no effect on the direction of GBT Technologies i.e., GBT Technologies and POSaBIT Systems go up and down completely randomly.

Pair Corralation between GBT Technologies and POSaBIT Systems

Given the investment horizon of 90 days GBT Technologies is expected to generate 29.85 times more return on investment than POSaBIT Systems. However, GBT Technologies is 29.85 times more volatile than POSaBIT Systems Corp. It trades about 0.21 of its potential returns per unit of risk. POSaBIT Systems Corp is currently generating about 0.05 per unit of risk. If you would invest  0.01  in GBT Technologies on December 19, 2024 and sell it today you would earn a total of  0.00  from holding GBT Technologies or generate 0.0% return on investment over 90 days.

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

GBT Technologies  vs.  POSaBIT Systems Corp

GBT Technologies

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in GBT Technologies are ranked lower than 16 (%) 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.

POSaBIT Systems Corp

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in POSaBIT Systems Corp are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, POSaBIT Systems reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with GBT Technologies and POSaBIT Systems

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

The idea behind GBT Technologies and POSaBIT Systems Corp 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.