Correlation Between GBT Technologies and Xalles Holdings

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

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

Diversification Opportunities for GBT Technologies and Xalles Holdings

-0.12

Correlation Coefficient

GBT Technologies  Xalles Holdings

Good diversification

The 3 months correlation between GBT and Xalles is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding GBT Technologies and Xalles Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Xalles Holdings 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 Xalles Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Xalles Holdings has no effect on the direction of GBT Technologies i.e., GBT Technologies and Xalles Holdings go up and down completely randomly.

Pair Corralation between GBT Technologies and Xalles Holdings

Given the investment horizon of 90 days GBT Technologies is expected to generate 15.06 times more return on investment than Xalles Holdings. However, GBT Technologies is 15.06 times more volatile than Xalles Holdings. It trades about 0.17 of its potential returns per unit of risk. Xalles Holdings is currently generating about 0.01 per unit of risk. If you would invest  0.05  in GBT Technologies on December 2, 2024 and sell it today you would lose (0.04) from holding GBT Technologies or give up 80.0% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	99.8%
Values	Daily Returns

GBT Technologies  vs.  Xalles Holdings

GBT Technologies

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in GBT Technologies are ranked lower than 19 (%) 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.

Xalles Holdings

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Xalles Holdings are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite quite inconsistent essential indicators, Xalles Holdings disclosed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with GBT Technologies and Xalles Holdings

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

The idea behind GBT Technologies and Xalles Holdings 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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.