Correlation Between G Tec and Refex Industries

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

Diversification Opportunities for G Tec and Refex Industries

0.54

Correlation Coefficient

G Tec  Refex Industries

Very weak diversification

The 3 months correlation between GTECJAINX and Refex is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding G Tec Jainx Education and Refex Industries Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Refex Industries 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 Refex Industries. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Refex Industries has no effect on the direction of G Tec i.e., G Tec and Refex Industries go up and down completely randomly.

Pair Corralation between G Tec and Refex Industries

Assuming the 90 days trading horizon G Tec Jainx Education is expected to generate 0.91 times more return on investment than Refex Industries. However, G Tec Jainx Education is 1.1 times less risky than Refex Industries. It trades about -0.03 of its potential returns per unit of risk. Refex Industries Limited is currently generating about -0.11 per unit of risk. If you would invest  3,554  in G Tec Jainx Education on December 28, 2024 and sell it today you would lose (254.00) from holding G Tec Jainx Education or give up 7.15% of portfolio value over 90 days.

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

G Tec Jainx Education  vs.  Refex Industries Limited

G Tec Jainx

Risk-Adjusted Performance

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 fairly strong forward indicators, G Tec is not utilizing all of its potentials. The newest stock price confusion, may contribute to short-horizon losses for the traders.

Refex Industries

Risk-Adjusted Performance

Very Weak

Over the last 90 days Refex Industries Limited has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unfluctuating performance in the last few months, the Stock's technical and fundamental indicators remain very healthy which may send shares a bit higher in April 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Pair Trading with G Tec and Refex Industries

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

The idea behind G Tec Jainx Education and Refex Industries Limited 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.

Check out your portfolio center.

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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..