Correlation Between GACM Technologies and Sarthak Metals
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By analyzing existing cross correlation between GACM Technologies Limited and Sarthak Metals Limited, you can compare the effects of market volatilities on GACM Technologies and Sarthak Metals 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 Sarthak Metals. Check out your portfolio center. Please also check ongoing floating volatility patterns of GACM Technologies and Sarthak Metals.
Diversification Opportunities for GACM Technologies and Sarthak Metals
0.49 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between GACM and Sarthak is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding GACM Technologies Limited and Sarthak Metals Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sarthak Metals 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 Sarthak Metals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sarthak Metals has no effect on the direction of GACM Technologies i.e., GACM Technologies and Sarthak Metals go up and down completely randomly.
Pair Corralation between GACM Technologies and Sarthak Metals
Assuming the 90 days trading horizon GACM Technologies Limited is expected to generate 0.67 times more return on investment than Sarthak Metals. However, GACM Technologies Limited is 1.48 times less risky than Sarthak Metals. It trades about 0.04 of its potential returns per unit of risk. Sarthak Metals Limited is currently generating about 0.02 per unit of risk. If you would invest 92.00 in GACM Technologies Limited on November 5, 2024 and sell it today you would earn a total of 1.00 from holding GACM Technologies Limited or generate 1.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
GACM Technologies Limited vs. Sarthak Metals Limited
Performance |
| Timeline |
| GACM Technologies |
| Sarthak Metals |
GACM Technologies and Sarthak Metals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GACM Technologies and Sarthak Metals
The main advantage of trading using opposite GACM Technologies and Sarthak Metals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GACM Technologies position performs unexpectedly, Sarthak Metals 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 Sarthak Metals will offset losses from the drop in Sarthak Metals' long position.The idea behind GACM Technologies Limited and Sarthak Metals Limited 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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