Correlation Between GM Breweries and Investment Trust
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By analyzing existing cross correlation between GM Breweries Limited and The Investment Trust, you can compare the effects of market volatilities on GM Breweries and Investment Trust 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 GM Breweries with a short position of Investment Trust. Check out your portfolio center. Please also check ongoing floating volatility patterns of GM Breweries and Investment Trust.
Diversification Opportunities for GM Breweries and Investment Trust
-0.47 | Correlation Coefficient |
Very good diversification
The 3 months correlation between GMBREW and Investment is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding GM Breweries Limited and The Investment Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Investment Trust and GM Breweries 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 GM Breweries Limited are associated (or correlated) with Investment Trust. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Investment Trust has no effect on the direction of GM Breweries i.e., GM Breweries and Investment Trust go up and down completely randomly.
Pair Corralation between GM Breweries and Investment Trust
Assuming the 90 days trading horizon GM Breweries is expected to generate 1.3 times less return on investment than Investment Trust. In addition to that, GM Breweries is 1.24 times more volatile than The Investment Trust. It trades about 0.05 of its total potential returns per unit of risk. The Investment Trust is currently generating about 0.08 per unit of volatility. If you would invest 8,610 in The Investment Trust on September 18, 2024 and sell it today you would earn a total of 12,483 from holding The Investment Trust or generate 144.98% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 99.8% |
| Values | Daily Returns |
GM Breweries Limited vs. The Investment Trust
Performance |
| Timeline |
| GM Breweries Limited |
| Investment Trust |
GM Breweries and Investment Trust Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GM Breweries and Investment Trust
The main advantage of trading using opposite GM Breweries and Investment Trust positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GM Breweries position performs unexpectedly, Investment Trust 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 Investment Trust will offset losses from the drop in Investment Trust's long position.| GM Breweries vs. Kaushalya Infrastructure Development | GM Breweries vs. Tarapur Transformers Limited | GM Breweries vs. Kingfa Science Technology | GM Breweries vs. Rico Auto Industries |
| Investment Trust vs. Jindal Drilling And | Investment Trust vs. California Software | Investment Trust vs. GM Breweries Limited | Investment Trust vs. BF Utilities Limited |
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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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