Correlation Between Industrial Investment and GACM Technologies

Can any of the company-specific risk be diversified away by investing in both Industrial Investment and GACM Technologies 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 Industrial Investment and GACM Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Industrial Investment Trust and GACM Technologies Limited, you can compare the effects of market volatilities on Industrial Investment and GACM Technologies 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 Industrial Investment with a short position of GACM Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Industrial Investment and GACM Technologies.

Diversification Opportunities for Industrial Investment and GACM Technologies

-0.65

Correlation Coefficient

Industrial Investment  GACM Technologies

Excellent diversification

The 3 months correlation between Industrial and GACM is -0.65. Overlapping area represents the amount of risk that can be diversified away by holding Industrial Investment Trust and GACM Technologies Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GACM Technologies and Industrial Investment 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 Industrial Investment Trust are associated (or correlated) with GACM Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GACM Technologies has no effect on the direction of Industrial Investment i.e., Industrial Investment and GACM Technologies go up and down completely randomly.

Pair Corralation between Industrial Investment and GACM Technologies

Assuming the 90 days trading horizon Industrial Investment is expected to generate 4.91 times less return on investment than GACM Technologies. In addition to that, Industrial Investment is 1.15 times more volatile than GACM Technologies Limited. It trades about 0.05 of its total potential returns per unit of risk. GACM Technologies Limited is currently generating about 0.26 per unit of volatility. If you would invest  86.00  in GACM Technologies Limited on September 19, 2024 and sell it today you would earn a total of  12.00  from holding GACM Technologies Limited or generate 13.95% return on investment over 90 days.

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

Industrial Investment Trust  vs.  GACM Technologies Limited

Industrial Investment

Risk-Adjusted Performance

25 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Industrial Investment Trust are ranked lower than 25 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unsteady basic indicators, Industrial Investment unveiled solid returns over the last few months and may actually be approaching a breakup point.

GACM Technologies

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days GACM Technologies Limited has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's fundamental indicators remain rather sound which may send shares a bit higher in January 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Pair Trading with Industrial Investment and GACM Technologies

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

The idea behind Industrial Investment Trust and GACM Technologies 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.