Correlation Between POSaBIT Systems and GBT Technologies

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

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

Diversification Opportunities for POSaBIT Systems and GBT Technologies

-0.54

Correlation Coefficient

POSaBIT Systems  GBT Technologies

Excellent diversification

The 3 months correlation between POSaBIT and GBT is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding POSaBIT Systems Corp and GBT Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GBT Technologies and POSaBIT Systems 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 POSaBIT Systems Corp 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 POSaBIT Systems i.e., POSaBIT Systems and GBT Technologies go up and down completely randomly.

Pair Corralation between POSaBIT Systems and GBT Technologies

Assuming the 90 days horizon POSaBIT Systems Corp is expected to under-perform the GBT Technologies. But the otc stock apears to be less risky and, when comparing its historical volatility, POSaBIT Systems Corp is 26.5 times less risky than GBT Technologies. The otc stock trades about -0.04 of its potential returns per unit of risk. The GBT Technologies is currently generating about 0.22 of returns per unit of risk over similar time horizon. If you would invest  0.01  in GBT Technologies on October 24, 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	Very Weak
Accuracy	100.0%
Values	Daily Returns

POSaBIT Systems Corp  vs.  GBT Technologies

POSaBIT Systems Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days POSaBIT Systems Corp has generated negative risk-adjusted returns adding no value to investors with long positions. Despite unsteady performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

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 POSaBIT Systems and GBT Technologies

The main advantage of trading using opposite POSaBIT Systems and GBT Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if POSaBIT Systems 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 POSaBIT Systems Corp 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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.