Correlation Between GECI International and Verimatrix
Can any of the company-specific risk be diversified away by investing in both GECI International and Verimatrix 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 GECI International and Verimatrix into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GECI International SA and Verimatrix, you can compare the effects of market volatilities on GECI International and Verimatrix 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 GECI International with a short position of Verimatrix. Check out your portfolio center. Please also check ongoing floating volatility patterns of GECI International and Verimatrix.
Diversification Opportunities for GECI International and Verimatrix
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between GECI and Verimatrix is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding GECI International SA and Verimatrix in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Verimatrix and GECI International 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 GECI International SA are associated (or correlated) with Verimatrix. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Verimatrix has no effect on the direction of GECI International i.e., GECI International and Verimatrix go up and down completely randomly.
Pair Corralation between GECI International and Verimatrix
Assuming the 90 days trading horizon GECI International SA is expected to generate 4.8 times more return on investment than Verimatrix. However, GECI International is 4.8 times more volatile than Verimatrix. It trades about 0.09 of its potential returns per unit of risk. Verimatrix is currently generating about -0.02 per unit of risk. If you would invest 100.00 in GECI International SA on September 2, 2024 and sell it today you would earn a total of 170.00 from holding GECI International SA or generate 170.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.6% |
| Values | Daily Returns |
GECI International SA vs. Verimatrix
Performance |
| Timeline |
| GECI International |
| Verimatrix |
GECI International and Verimatrix Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GECI International and Verimatrix
The main advantage of trading using opposite GECI International and Verimatrix positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GECI International position performs unexpectedly, Verimatrix 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 Verimatrix will offset losses from the drop in Verimatrix's long position.| GECI International vs. Claranova SE | GECI International vs. Nacon Sa | GECI International vs. Solutions 30 SE | GECI International vs. Ekinops SA |
| Verimatrix vs. Claranova SE | Verimatrix vs. Nacon Sa | Verimatrix vs. Solutions 30 SE | Verimatrix vs. Ekinops SA |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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