Correlation Between Gildan Activewear and NetSol Technologies

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Can any of the company-specific risk be diversified away by investing in both Gildan Activewear and NetSol 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 Gildan Activewear and NetSol Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Gildan Activewear and NetSol Technologies, you can compare the effects of market volatilities on Gildan Activewear and NetSol 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 Gildan Activewear with a short position of NetSol Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gildan Activewear and NetSol Technologies.

Diversification Opportunities for Gildan Activewear and NetSol Technologies

0.0
  Correlation Coefficient

Pay attention - limited upside

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

Pair Corralation between Gildan Activewear and NetSol Technologies

If you would invest  240.00  in NetSol Technologies on September 9, 2024 and sell it today you would earn a total of  12.00  from holding NetSol Technologies or generate 5.0% return on investment over 90 days.
Time Period3 Months [change]
DirectionFlat 
StrengthInsignificant
Accuracy1.52%
ValuesDaily Returns

Gildan Activewear  vs.  NetSol Technologies

 Performance 
       Timeline  
Gildan Activewear 

Risk-Adjusted Performance

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Solid
Over the last 90 days Gildan Activewear has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Gildan Activewear is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.
NetSol Technologies 

Risk-Adjusted Performance

3 of 100

 
Weak
 
Strong
Insignificant
Compared to the overall equity markets, risk-adjusted returns on investments in NetSol Technologies are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite nearly uncertain basic indicators, NetSol Technologies may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Gildan Activewear and NetSol Technologies Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Gildan Activewear and NetSol Technologies

The main advantage of trading using opposite Gildan Activewear and NetSol Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gildan Activewear position performs unexpectedly, NetSol 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 NetSol Technologies will offset losses from the drop in NetSol Technologies' long position.
The idea behind Gildan Activewear and NetSol 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.
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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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.

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