Correlation Between Trucept and GEE

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

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

Diversification Opportunities for Trucept and GEE

0.48

Correlation Coefficient

Trucept  GEE

Very weak diversification

The 3 months correlation between Trucept and GEE is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding Trucept and GEE Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GEE Group and Trucept 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 Trucept 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 Trucept i.e., Trucept and GEE go up and down completely randomly.

Pair Corralation between Trucept and GEE

Given the investment horizon of 90 days Trucept is expected to under-perform the GEE. In addition to that, Trucept is 3.07 times more volatile than GEE Group. It trades about -0.07 of its total potential returns per unit of risk. GEE Group is currently generating about -0.14 per unit of volatility. If you would invest  25.00  in GEE Group on October 7, 2024 and sell it today you would lose (3.00) from holding GEE Group or give up 12.0% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

Trucept  vs.  GEE Group

Trucept

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Trucept are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Even with relatively fragile technical and fundamental indicators, Trucept reported solid returns over the last few months and may actually be approaching a breakup point.

GEE Group

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days GEE Group 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 somewhat strong which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with Trucept and GEE

The main advantage of trading using opposite Trucept and GEE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Trucept 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 Trucept 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.