Correlation Between GX AI and Lupatech
Can any of the company-specific risk be diversified away by investing in both GX AI and Lupatech 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 GX AI and Lupatech into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GX AI TECH and Lupatech SA, you can compare the effects of market volatilities on GX AI and Lupatech 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 GX AI with a short position of Lupatech. Check out your portfolio center. Please also check ongoing floating volatility patterns of GX AI and Lupatech.
Diversification Opportunities for GX AI and Lupatech
Excellent diversification
The 3 months correlation between BAIQ39 and Lupatech is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding GX AI TECH and Lupatech SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lupatech SA and GX AI 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 GX AI TECH are associated (or correlated) with Lupatech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lupatech SA has no effect on the direction of GX AI i.e., GX AI and Lupatech go up and down completely randomly.
Pair Corralation between GX AI and Lupatech
Assuming the 90 days trading horizon GX AI TECH is expected to generate 0.5 times more return on investment than Lupatech. However, GX AI TECH is 2.0 times less risky than Lupatech. It trades about 0.15 of its potential returns per unit of risk. Lupatech SA is currently generating about -0.06 per unit of risk. If you would invest 4,781 in GX AI TECH on September 14, 2024 and sell it today you would earn a total of 3,214 from holding GX AI TECH or generate 67.22% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 90.41% |
| Values | Daily Returns |
GX AI TECH vs. Lupatech SA
Performance |
| Timeline |
| GX AI TECH |
| Lupatech SA |
GX AI and Lupatech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GX AI and Lupatech
The main advantage of trading using opposite GX AI and Lupatech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GX AI position performs unexpectedly, Lupatech 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 Lupatech will offset losses from the drop in Lupatech's long position.| GX AI vs. Take Two Interactive Software | GX AI vs. Bio Techne | GX AI vs. Micron Technology | GX AI vs. Dell Technologies |
| Lupatech vs. PDG Realty SA | Lupatech vs. Positivo Tecnologia SA | Lupatech vs. Rossi Residencial SA | Lupatech vs. Gafisa 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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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