Correlation Between Soluna Holdings and GBT Technologies

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

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

Diversification Opportunities for Soluna Holdings and GBT Technologies

0.24

Correlation Coefficient

Soluna Holdings  GBT Technologies

Modest diversification

The 3 months correlation between Soluna and GBT is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding Soluna Holdings Preferred and GBT Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GBT Technologies and Soluna Holdings 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 Soluna Holdings Preferred 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 Soluna Holdings i.e., Soluna Holdings and GBT Technologies go up and down completely randomly.

Pair Corralation between Soluna Holdings and GBT Technologies

Assuming the 90 days horizon Soluna Holdings Preferred is expected to under-perform the GBT Technologies. But the preferred stock apears to be less risky and, when comparing its historical volatility, Soluna Holdings Preferred is 44.35 times less risky than GBT Technologies. The preferred stock trades about -0.1 of its potential returns per unit of risk. The GBT Technologies is currently generating about 0.21 of returns per unit of risk over similar time horizon. If you would invest  0.01  in GBT Technologies on December 19, 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 Together
Strength	Very Weak
Accuracy	98.33%
Values	Daily Returns

Soluna Holdings Preferred  vs.  GBT Technologies

Soluna Holdings Preferred

Risk-Adjusted Performance

Very Weak

Over the last 90 days Soluna Holdings Preferred has generated negative risk-adjusted returns adding no value to investors with long positions. Even with inconsistent performance in the last few months, the Preferred Stock's technical indicators remain relatively invariable which may send shares a bit higher in April 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

GBT Technologies

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in GBT Technologies are ranked lower than 16 (%) 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 Soluna Holdings and GBT Technologies

The main advantage of trading using opposite Soluna Holdings and GBT Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Soluna Holdings 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 Soluna Holdings Preferred 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.

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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.