Correlation Between Libra Insurance and Gamatronic Electronic

Can any of the company-specific risk be diversified away by investing in both Libra Insurance and Gamatronic Electronic 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 Libra Insurance and Gamatronic Electronic into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Libra Insurance and Gamatronic Electronic Industries, you can compare the effects of market volatilities on Libra Insurance and Gamatronic Electronic 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 Libra Insurance with a short position of Gamatronic Electronic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Libra Insurance and Gamatronic Electronic.

Diversification Opportunities for Libra Insurance and Gamatronic Electronic

-0.63

Correlation Coefficient

Libra Insurance  Gamatronic Electronic

Excellent diversification

The 3 months correlation between Libra and Gamatronic is -0.63. Overlapping area represents the amount of risk that can be diversified away by holding Libra Insurance and Gamatronic Electronic Industri in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gamatronic Electronic and Libra Insurance 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 Libra Insurance are associated (or correlated) with Gamatronic Electronic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gamatronic Electronic has no effect on the direction of Libra Insurance i.e., Libra Insurance and Gamatronic Electronic go up and down completely randomly.

Pair Corralation between Libra Insurance and Gamatronic Electronic

Assuming the 90 days trading horizon Libra Insurance is expected to generate 0.82 times more return on investment than Gamatronic Electronic. However, Libra Insurance is 1.23 times less risky than Gamatronic Electronic. It trades about 0.11 of its potential returns per unit of risk. Gamatronic Electronic Industries is currently generating about -0.03 per unit of risk. If you would invest  33,442  in Libra Insurance on September 4, 2024 and sell it today you would earn a total of  53,848  from holding Libra Insurance or generate 161.02% return on investment over 90 days.

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

Libra Insurance  vs.  Gamatronic Electronic Industri

Libra Insurance

Risk-Adjusted Performance

34 of 100

Very Strong

Compared to the overall equity markets, risk-adjusted returns on investments in Libra Insurance are ranked lower than 34 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Libra Insurance sustained solid returns over the last few months and may actually be approaching a breakup point.

Gamatronic Electronic

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Gamatronic Electronic Industries has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with Libra Insurance and Gamatronic Electronic

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

The idea behind Libra Insurance and Gamatronic Electronic Industries 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.