Correlation Between G Tec and Samhi Hotels

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

Diversification Opportunities for G Tec and Samhi Hotels

-0.17

Correlation Coefficient

G Tec  Samhi Hotels

Good diversification

The 3 months correlation between GTECJAINX and Samhi is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding G Tec Jainx Education and Samhi Hotels Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Samhi Hotels Limited 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 Samhi Hotels. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Samhi Hotels Limited has no effect on the direction of G Tec i.e., G Tec and Samhi Hotels go up and down completely randomly.

Pair Corralation between G Tec and Samhi Hotels

Assuming the 90 days trading horizon G Tec Jainx Education is expected to under-perform the Samhi Hotels. In addition to that, G Tec is 1.43 times more volatile than Samhi Hotels Limited. It trades about -0.08 of its total potential returns per unit of risk. Samhi Hotels Limited is currently generating about 0.03 per unit of volatility. If you would invest  18,442  in Samhi Hotels Limited on October 26, 2024 and sell it today you would earn a total of  469.00  from holding Samhi Hotels Limited or generate 2.54% return on investment over 90 days.

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

G Tec Jainx Education  vs.  Samhi Hotels Limited

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.

Samhi Hotels Limited

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Samhi Hotels Limited are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy primary indicators, Samhi Hotels is not utilizing all of its potentials. The latest stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with G Tec and Samhi Hotels

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

The idea behind G Tec Jainx Education and Samhi Hotels 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.

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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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.