Correlation Between Nagarro SE and GBT Technologies

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

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

Diversification Opportunities for Nagarro SE and GBT Technologies

-0.13

Correlation Coefficient

Nagarro SE  GBT Technologies

Good diversification

The 3 months correlation between Nagarro and GBT is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding Nagarro SE and GBT Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GBT Technologies and Nagarro SE 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 Nagarro SE are associated (or correlated) with GBT Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GBT Technologies has no effect on the direction of Nagarro SE i.e., Nagarro SE and GBT Technologies go up and down completely randomly.

Pair Corralation between Nagarro SE and GBT Technologies

Assuming the 90 days horizon Nagarro SE is expected to generate 250.0 times less return on investment than GBT Technologies. But when comparing it to its historical volatility, Nagarro SE is 68.87 times less risky than GBT Technologies. It trades about 0.06 of its potential returns per unit of risk. GBT Technologies is currently generating about 0.23 of returns per unit of risk over similar time horizon. If you would invest  0.01  in GBT Technologies on September 12, 2024 and sell it today you would earn a total of  0.00  from holding GBT Technologies or generate 0.0% return on investment over 90 days.

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

Nagarro SE  vs.  GBT Technologies

Nagarro SE

Risk-Adjusted Performance

4 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Nagarro SE are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Nagarro SE reported solid returns over the last few months and may actually be approaching a breakup point.

GBT Technologies

Risk-Adjusted Performance

17 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in GBT Technologies are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. Despite fairly weak fundamental indicators, GBT Technologies demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Nagarro SE and GBT Technologies

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

The idea behind Nagarro SE and GBT Technologies 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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..