Correlation Between G Tec and Akme Fintrade

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

By analyzing existing cross correlation between G Tec Jainx Education and Akme Fintrade India, you can compare the effects of market volatilities on G Tec and Akme Fintrade 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 G Tec with a short position of Akme Fintrade. Check out your portfolio center. Please also check ongoing floating volatility patterns of G Tec and Akme Fintrade.

Diversification Opportunities for G Tec and Akme Fintrade

0.68

Correlation Coefficient

G Tec  Akme Fintrade

Poor diversification

The 3 months correlation between GTECJAINX and Akme is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding G Tec Jainx Education and Akme Fintrade India in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Akme Fintrade India and G Tec 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 G Tec Jainx Education are associated (or correlated) with Akme Fintrade. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Akme Fintrade India has no effect on the direction of G Tec i.e., G Tec and Akme Fintrade go up and down completely randomly.

Pair Corralation between G Tec and Akme Fintrade

Assuming the 90 days trading horizon G Tec Jainx Education is expected to under-perform the Akme Fintrade. In addition to that, G Tec is 1.07 times more volatile than Akme Fintrade India. It trades about -0.25 of its total potential returns per unit of risk. Akme Fintrade India is currently generating about -0.12 per unit of volatility. If you would invest  10,231  in Akme Fintrade India on October 9, 2024 and sell it today you would lose (2,259) from holding Akme Fintrade India or give up 22.08% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

G Tec Jainx Education  vs.  Akme Fintrade India

G Tec Jainx

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days G Tec Jainx Education has generated negative risk-adjusted returns adding no value to investors with long positions. Despite uncertain performance in the last few months, the Stock's forward indicators remain fairly strong which may send shares a bit higher in February 2025. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.

Akme Fintrade India

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Akme Fintrade India has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in February 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with G Tec and Akme Fintrade

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

The idea behind G Tec Jainx Education and Akme Fintrade India 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 Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.