Correlation Between Ironbark Capital and GQG Partners

Can any of the company-specific risk be diversified away by investing in both Ironbark Capital and GQG Partners 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 Ironbark Capital and GQG Partners into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Ironbark Capital and GQG Partners DRC, you can compare the effects of market volatilities on Ironbark Capital and GQG Partners 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 Ironbark Capital with a short position of GQG Partners. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ironbark Capital and GQG Partners.

Diversification Opportunities for Ironbark Capital and GQG Partners

-0.29

Correlation Coefficient

Ironbark Capital  GQG Partners

Very good diversification

The 3 months correlation between Ironbark and GQG is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding Ironbark Capital and GQG Partners DRC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GQG Partners DRC and Ironbark Capital 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 Ironbark Capital are associated (or correlated) with GQG Partners. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GQG Partners DRC has no effect on the direction of Ironbark Capital i.e., Ironbark Capital and GQG Partners go up and down completely randomly.

Pair Corralation between Ironbark Capital and GQG Partners

Assuming the 90 days trading horizon Ironbark Capital is expected to generate 3.46 times less return on investment than GQG Partners. But when comparing it to its historical volatility, Ironbark Capital is 2.6 times less risky than GQG Partners. It trades about 0.05 of its potential returns per unit of risk. GQG Partners DRC is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest  203.00  in GQG Partners DRC on December 29, 2024 and sell it today you would earn a total of  15.00  from holding GQG Partners DRC or generate 7.39% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.44%
Values	Daily Returns

Ironbark Capital  vs.  GQG Partners DRC

Ironbark Capital

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Ironbark Capital are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable fundamental indicators, Ironbark Capital is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

GQG Partners DRC

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in GQG Partners DRC are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain technical and fundamental indicators, GQG Partners may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Ironbark Capital and GQG Partners

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

The idea behind Ironbark Capital and GQG Partners DRC 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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.