Correlation Between GBT Technologies and SEATech Ventures

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

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

Diversification Opportunities for GBT Technologies and SEATech Ventures

0.07

Correlation Coefficient

GBT Technologies  SEATech Ventures

Significant diversification

The 3 months correlation between GBT and SEATech is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding GBT Technologies and SEATech Ventures Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SEATech Ventures 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 SEATech Ventures. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SEATech Ventures Corp has no effect on the direction of GBT Technologies i.e., GBT Technologies and SEATech Ventures go up and down completely randomly.

Pair Corralation between GBT Technologies and SEATech Ventures

Given the investment horizon of 90 days GBT Technologies is expected to generate 31.32 times more return on investment than SEATech Ventures. However, GBT Technologies is 31.32 times more volatile than SEATech Ventures Corp. It trades about 0.19 of its potential returns per unit of risk. SEATech Ventures Corp is currently generating about -0.25 per unit of risk. If you would invest  0.01  in GBT Technologies on August 30, 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 Together
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

GBT Technologies  vs.  SEATech Ventures Corp

GBT Technologies

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in GBT Technologies are ranked lower than 12 (%) 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.

SEATech Ventures Corp

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in SEATech Ventures Corp are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of fairly inconsistent basic indicators, SEATech Ventures showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with GBT Technologies and SEATech Ventures

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

The idea behind GBT Technologies and SEATech Ventures 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.