Correlation Between GACM Technologies and One 97

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Can any of the company-specific risk be diversified away by investing in both GACM Technologies and One 97 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 GACM Technologies and One 97 into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GACM Technologies Limited and One 97 Communications, you can compare the effects of market volatilities on GACM Technologies and One 97 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 One 97. Check out your portfolio center. Please also check ongoing floating volatility patterns of GACM Technologies and One 97.

Diversification Opportunities for GACM Technologies and One 97

-0.38
  Correlation Coefficient

Very good diversification

The 3 months correlation between GACM and One is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding GACM Technologies Limited and One 97 Communications in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on One 97 Communications 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 One 97. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of One 97 Communications has no effect on the direction of GACM Technologies i.e., GACM Technologies and One 97 go up and down completely randomly.

Pair Corralation between GACM Technologies and One 97

Assuming the 90 days trading horizon GACM Technologies Limited is expected to generate 0.89 times more return on investment than One 97. However, GACM Technologies Limited is 1.13 times less risky than One 97. It trades about 0.37 of its potential returns per unit of risk. One 97 Communications is currently generating about 0.14 per unit of risk. If you would invest  85.00  in GACM Technologies Limited on September 24, 2024 and sell it today you would earn a total of  13.00  from holding GACM Technologies Limited or generate 15.29% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

GACM Technologies Limited  vs.  One 97 Communications

 Performance 
       Timeline  
GACM Technologies 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days GACM Technologies Limited has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of conflicting performance in the last few months, the Stock's fundamental indicators remain rather sound which may send shares a bit higher in January 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.
One 97 Communications 

Risk-Adjusted Performance

12 of 100

 
Weak
 
Strong
Good
Compared to the overall equity markets, risk-adjusted returns on investments in One 97 Communications are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of very weak basic indicators, One 97 displayed solid returns over the last few months and may actually be approaching a breakup point.

GACM Technologies and One 97 Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with GACM Technologies and One 97

The main advantage of trading using opposite GACM Technologies and One 97 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GACM Technologies position performs unexpectedly, One 97 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 One 97 will offset losses from the drop in One 97's long position.
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The idea behind GACM Technologies Limited and One 97 Communications 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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.

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