Correlation Between G Tec and City Union

Can any of the company-specific risk be diversified away by investing in both G Tec and City Union 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 City Union 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 City Union Bank, you can compare the effects of market volatilities on G Tec and City Union 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 City Union. Check out your portfolio center. Please also check ongoing floating volatility patterns of G Tec and City Union.

Diversification Opportunities for G Tec and City Union

-0.77

Correlation Coefficient

G Tec  City Union

Pay attention - limited upside

The 3 months correlation between GTECJAINX and City is -0.77. Overlapping area represents the amount of risk that can be diversified away by holding G Tec Jainx Education and City Union Bank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on City Union Bank 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 City Union. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of City Union Bank has no effect on the direction of G Tec i.e., G Tec and City Union go up and down completely randomly.

Pair Corralation between G Tec and City Union

Assuming the 90 days trading horizon G Tec Jainx Education is expected to under-perform the City Union. In addition to that, G Tec is 2.27 times more volatile than City Union Bank. It trades about -0.15 of its total potential returns per unit of risk. City Union Bank is currently generating about -0.34 per unit of volatility. If you would invest  18,627  in City Union Bank on October 9, 2024 and sell it today you would lose (1,744) from holding City Union Bank or give up 9.36% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	95.0%
Values	Daily Returns

G Tec Jainx Education  vs.  City Union Bank

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.

City Union Bank

Risk-Adjusted Performance

6 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in City Union Bank are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of rather weak technical and fundamental indicators, City Union may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with G Tec and City Union

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

The idea behind G Tec Jainx Education and City Union Bank 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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.