Correlation Between GACM Technologies and Gujarat Raffia
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By analyzing existing cross correlation between GACM Technologies Limited and Gujarat Raffia Industries, you can compare the effects of market volatilities on GACM Technologies and Gujarat Raffia 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 GACM Technologies with a short position of Gujarat Raffia. Check out your portfolio center. Please also check ongoing floating volatility patterns of GACM Technologies and Gujarat Raffia.
Diversification Opportunities for GACM Technologies and Gujarat Raffia
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between GACM and Gujarat is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding GACM Technologies Limited and Gujarat Raffia Industries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gujarat Raffia Industries and GACM Technologies 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 GACM Technologies Limited are associated (or correlated) with Gujarat Raffia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gujarat Raffia Industries has no effect on the direction of GACM Technologies i.e., GACM Technologies and Gujarat Raffia go up and down completely randomly.
Pair Corralation between GACM Technologies and Gujarat Raffia
Assuming the 90 days trading horizon GACM Technologies Limited is expected to under-perform the Gujarat Raffia. In addition to that, GACM Technologies is 1.37 times more volatile than Gujarat Raffia Industries. It trades about -0.09 of its total potential returns per unit of risk. Gujarat Raffia Industries is currently generating about -0.02 per unit of volatility. If you would invest 4,546 in Gujarat Raffia Industries on August 29, 2024 and sell it today you would lose (133.00) from holding Gujarat Raffia Industries or give up 2.93% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
GACM Technologies Limited vs. Gujarat Raffia Industries
Performance |
| Timeline |
| GACM Technologies |
| Gujarat Raffia Industries |
GACM Technologies and Gujarat Raffia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GACM Technologies and Gujarat Raffia
The main advantage of trading using opposite GACM Technologies and Gujarat Raffia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GACM Technologies position performs unexpectedly, Gujarat Raffia 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 Gujarat Raffia will offset losses from the drop in Gujarat Raffia's long position.The idea behind GACM Technologies Limited and Gujarat Raffia Industries 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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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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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