Correlation Between Solana and GMB

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

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

Diversification Opportunities for Solana and GMB

0.0

Correlation Coefficient

Solana  GMB

Pay attention - limited upside

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

Pair Corralation between Solana and GMB

If you would invest (100.00) in GMB on December 29, 2024 and sell it today you would earn a total of  100.00  from holding GMB or generate -100.0% return on investment over 90 days.

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

Solana  vs.  GMB

Solana

Risk-Adjusted Performance

Very Weak

Over the last 90 days Solana has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Crypto's essential indicators remain rather sound which may send shares a bit higher in April 2025. The latest tumult may also be a sign of longer-term up-swing for Solana shareholders.

GMB

Risk-Adjusted Performance

Very Weak

Over the last 90 days GMB has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound fundamental drivers, GMB is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Solana and GMB

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

The idea behind Solana and GMB 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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.