Correlation Between RCRT Old and GEE

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

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

Diversification Opportunities for RCRT Old and GEE

-0.54

Correlation Coefficient

RCRT Old  GEE

Excellent diversification

The 3 months correlation between RCRT and GEE is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding RCRT Old and GEE Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GEE Group and RCRT Old 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 RCRT Old are associated (or correlated) with GEE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GEE Group has no effect on the direction of RCRT Old i.e., RCRT Old and GEE go up and down completely randomly.

Pair Corralation between RCRT Old and GEE

If you would invest  24.00  in GEE Group on October 9, 2024 and sell it today you would earn a total of  4.00  from holding GEE Group or generate 16.67% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	5.26%
Values	Daily Returns

RCRT Old  vs.  GEE Group

RCRT Old

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days RCRT Old has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, RCRT Old is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

GEE Group

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in GEE Group are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite somewhat unsteady basic indicators, GEE sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with RCRT Old and GEE

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

The idea behind RCRT Old and GEE Group 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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.