Correlation Between GEE and Futuris

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Can any of the company-specific risk be diversified away by investing in both GEE and Futuris 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 GEE and Futuris into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GEE Group and Futuris Company, you can compare the effects of market volatilities on GEE and Futuris 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 GEE with a short position of Futuris. Check out your portfolio center. Please also check ongoing floating volatility patterns of GEE and Futuris.

Diversification Opportunities for GEE and Futuris

0.1
  Correlation Coefficient

Average diversification

The 3 months correlation between GEE and Futuris is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding GEE Group and Futuris Company in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Futuris Company and GEE 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 GEE Group are associated (or correlated) with Futuris. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Futuris Company has no effect on the direction of GEE i.e., GEE and Futuris go up and down completely randomly.

Pair Corralation between GEE and Futuris

Considering the 90-day investment horizon GEE Group is expected to generate 0.91 times more return on investment than Futuris. However, GEE Group is 1.09 times less risky than Futuris. It trades about 0.16 of its potential returns per unit of risk. Futuris Company is currently generating about 0.01 per unit of risk. If you would invest  21.00  in GEE Group on October 22, 2024 and sell it today you would earn a total of  5.00  from holding GEE Group or generate 23.81% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthInsignificant
Accuracy95.0%
ValuesDaily Returns

GEE Group  vs.  Futuris Company

 Performance 
       Timeline  
GEE Group 

Risk-Adjusted Performance

2 of 100

 
Weak
 
Strong
Weak
Compared to the overall equity markets, risk-adjusted returns on investments in GEE Group are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite somewhat unsteady basic indicators, GEE may actually be approaching a critical reversion point that can send shares even higher in February 2025.
Futuris Company 

Risk-Adjusted Performance

1 of 100

 
Weak
 
Strong
Weak
Compared to the overall equity markets, risk-adjusted returns on investments in Futuris Company are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively fragile basic indicators, Futuris unveiled solid returns over the last few months and may actually be approaching a breakup point.

GEE and Futuris Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with GEE and Futuris

The main advantage of trading using opposite GEE and Futuris positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GEE position performs unexpectedly, Futuris 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 Futuris will offset losses from the drop in Futuris' long position.
The idea behind GEE Group and Futuris Company 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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.

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