Correlation Between GCL-Poly Energy and Nextracker
Can any of the company-specific risk be diversified away by investing in both GCL-Poly Energy and Nextracker 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 GCL-Poly Energy and Nextracker into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GCL Poly Energy Holdings and Nextracker Class A, you can compare the effects of market volatilities on GCL-Poly Energy and Nextracker 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 GCL-Poly Energy with a short position of Nextracker. Check out your portfolio center. Please also check ongoing floating volatility patterns of GCL-Poly Energy and Nextracker.
Diversification Opportunities for GCL-Poly Energy and Nextracker
-0.52 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between GCL-Poly and Nextracker is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding GCL Poly Energy Holdings and Nextracker Class A in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nextracker Class A and GCL-Poly Energy 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 GCL Poly Energy Holdings are associated (or correlated) with Nextracker. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nextracker Class A has no effect on the direction of GCL-Poly Energy i.e., GCL-Poly Energy and Nextracker go up and down completely randomly.
Pair Corralation between GCL-Poly Energy and Nextracker
Assuming the 90 days horizon GCL-Poly Energy is expected to generate 1.72 times less return on investment than Nextracker. But when comparing it to its historical volatility, GCL Poly Energy Holdings is 1.85 times less risky than Nextracker. It trades about 0.32 of its potential returns per unit of risk. Nextracker Class A is currently generating about 0.3 of returns per unit of risk over similar time horizon. If you would invest 3,944 in Nextracker Class A on November 4, 2024 and sell it today you would earn a total of 1,115 from holding Nextracker Class A or generate 28.27% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.24% |
| Values | Daily Returns |
GCL Poly Energy Holdings vs. Nextracker Class A
Performance |
| Timeline |
| GCL Poly Energy |
| Nextracker Class A |
GCL-Poly Energy and Nextracker Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GCL-Poly Energy and Nextracker
The main advantage of trading using opposite GCL-Poly Energy and Nextracker positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GCL-Poly Energy position performs unexpectedly, Nextracker 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 Nextracker will offset losses from the drop in Nextracker's long position.| GCL-Poly Energy vs. SMA Solar Technology | GCL-Poly Energy vs. Xinyi Solar Holdings | GCL-Poly Energy vs. SMA Solar Technology | GCL-Poly Energy vs. Three Sixty Solar |
| Nextracker vs. Estee Lauder Companies | Nextracker vs. Procter Gamble | Nextracker vs. Skechers USA | Nextracker vs. Rocky Brands |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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