Correlation Between G Tec and Summit Securities

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

Diversification Opportunities for G Tec and Summit Securities

-0.17

Correlation Coefficient

G Tec  Summit Securities

Good diversification

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

Pair Corralation between G Tec and Summit Securities

Assuming the 90 days trading horizon G Tec Jainx Education is expected to generate 1.17 times more return on investment than Summit Securities. However, G Tec is 1.17 times more volatile than Summit Securities Limited. It trades about 0.0 of its potential returns per unit of risk. Summit Securities Limited is currently generating about -0.42 per unit of risk. If you would invest  3,680  in G Tec Jainx Education on October 25, 2024 and sell it today you would lose (43.00) from holding G Tec Jainx Education or give up 1.17% of portfolio value over 90 days.

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

G Tec Jainx Education  vs.  Summit Securities 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.

Summit Securities

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Summit Securities Limited has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Summit Securities is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with G Tec and Summit Securities

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

The idea behind G Tec Jainx Education and Summit Securities 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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.