Correlation Between Solutions and GECI International

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

By analyzing existing cross correlation between Solutions 30 SE and GECI International SA, you can compare the effects of market volatilities on Solutions and GECI International 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 Solutions with a short position of GECI International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Solutions and GECI International.

Diversification Opportunities for Solutions and GECI International

0.0

Correlation Coefficient

Solutions  GECI International

Pay attention - limited upside

The 3 months correlation between Solutions and GECI is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Solutions 30 SE and GECI International SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GECI International and Solutions 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 Solutions 30 SE are associated (or correlated) with GECI International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GECI International has no effect on the direction of Solutions i.e., Solutions and GECI International go up and down completely randomly.

Pair Corralation between Solutions and GECI International

If you would invest  92.00  in Solutions 30 SE on December 31, 2024 and sell it today you would earn a total of  66.00  from holding Solutions 30 SE or generate 71.74% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Solutions 30 SE  vs.  GECI International SA

Solutions 30 SE

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Solutions 30 SE are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Solutions sustained solid returns over the last few months and may actually be approaching a breakup point.

GECI International

Risk-Adjusted Performance

Very Weak

Over the last 90 days GECI International SA has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, GECI International is not utilizing all of its potentials. The current stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with Solutions and GECI International

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

The idea behind Solutions 30 SE and GECI International SA 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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.