Correlation Between GSR II and Cuentas
Can any of the company-specific risk be diversified away by investing in both GSR II and Cuentas 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 GSR II and Cuentas into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GSR II Meteora and Cuentas, you can compare the effects of market volatilities on GSR II and Cuentas 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 GSR II with a short position of Cuentas. Check out your portfolio center. Please also check ongoing floating volatility patterns of GSR II and Cuentas.
Diversification Opportunities for GSR II and Cuentas
Excellent diversification
The 3 months correlation between GSR and Cuentas is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding GSR II Meteora and Cuentas in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cuentas and GSR II 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 GSR II Meteora are associated (or correlated) with Cuentas. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cuentas has no effect on the direction of GSR II i.e., GSR II and Cuentas go up and down completely randomly.
Pair Corralation between GSR II and Cuentas
If you would invest 3.00 in Cuentas on August 27, 2024 and sell it today you would earn a total of 0.00 from holding Cuentas or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
GSR II Meteora vs. Cuentas
Performance |
| Timeline |
| GSR II Meteora |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Cuentas |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
GSR II and Cuentas Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GSR II and Cuentas
The main advantage of trading using opposite GSR II and Cuentas positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GSR II position performs unexpectedly, Cuentas 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 Cuentas will offset losses from the drop in Cuentas' long position.The idea behind GSR II Meteora and Cuentas 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.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 Anywhere module to track or share privately all of your investments from the convenience of any device.
Other Complementary Tools
| Money Managers Screen money managers from public funds and ETFs managed around the world | |
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities | |
| Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities | |
| Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. | |
| Economic Indicators Top statistical indicators that provide insights into how an economy is performing |