Correlation Between Gamatronic Electronic and Libra Insurance
Can any of the company-specific risk be diversified away by investing in both Gamatronic Electronic and Libra Insurance 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 Gamatronic Electronic and Libra Insurance into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Gamatronic Electronic Industries and Libra Insurance, you can compare the effects of market volatilities on Gamatronic Electronic and Libra Insurance 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 Gamatronic Electronic with a short position of Libra Insurance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gamatronic Electronic and Libra Insurance.
Diversification Opportunities for Gamatronic Electronic and Libra Insurance
-0.7 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Gamatronic and Libra is -0.7. Overlapping area represents the amount of risk that can be diversified away by holding Gamatronic Electronic Industri and Libra Insurance in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Libra Insurance and Gamatronic Electronic 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 Gamatronic Electronic Industries are associated (or correlated) with Libra Insurance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Libra Insurance has no effect on the direction of Gamatronic Electronic i.e., Gamatronic Electronic and Libra Insurance go up and down completely randomly.
Pair Corralation between Gamatronic Electronic and Libra Insurance
Assuming the 90 days trading horizon Gamatronic Electronic Industries is expected to under-perform the Libra Insurance. In addition to that, Gamatronic Electronic is 1.39 times more volatile than Libra Insurance. It trades about -0.05 of its total potential returns per unit of risk. Libra Insurance is currently generating about 0.26 per unit of volatility. If you would invest 49,035 in Libra Insurance on August 29, 2024 and sell it today you would earn a total of 33,675 from holding Libra Insurance or generate 68.68% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Gamatronic Electronic Industri vs. Libra Insurance
Performance |
| Timeline |
| Gamatronic Electronic |
| Libra Insurance |
Gamatronic Electronic and Libra Insurance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gamatronic Electronic and Libra Insurance
The main advantage of trading using opposite Gamatronic Electronic and Libra Insurance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gamatronic Electronic position performs unexpectedly, Libra Insurance 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 Libra Insurance will offset losses from the drop in Libra Insurance's long position.| Gamatronic Electronic vs. Direct Capital Investments | Gamatronic Electronic vs. B Communications | Gamatronic Electronic vs. Holmes Place International | Gamatronic Electronic vs. Nova |
| Libra Insurance vs. Opal Balance | Libra Insurance vs. B Communications | Libra Insurance vs. Holmes Place International | Libra Insurance vs. Nova |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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