Correlation Between GSTechnologies and ONEOK
Can any of the company-specific risk be diversified away by investing in both GSTechnologies and ONEOK 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 GSTechnologies and ONEOK into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GSTechnologies and ONEOK Inc, you can compare the effects of market volatilities on GSTechnologies and ONEOK 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 GSTechnologies with a short position of ONEOK. Check out your portfolio center. Please also check ongoing floating volatility patterns of GSTechnologies and ONEOK.
Diversification Opportunities for GSTechnologies and ONEOK
0.28 | Correlation Coefficient |
Modest diversification
The 3 months correlation between GSTechnologies and ONEOK is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding GSTechnologies and ONEOK Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ONEOK Inc and GSTechnologies 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 GSTechnologies are associated (or correlated) with ONEOK. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ONEOK Inc has no effect on the direction of GSTechnologies i.e., GSTechnologies and ONEOK go up and down completely randomly.
Pair Corralation between GSTechnologies and ONEOK
Assuming the 90 days trading horizon GSTechnologies is expected to generate 6.75 times more return on investment than ONEOK. However, GSTechnologies is 6.75 times more volatile than ONEOK Inc. It trades about 0.56 of its potential returns per unit of risk. ONEOK Inc is currently generating about -0.15 per unit of risk. If you would invest 141.00 in GSTechnologies on October 11, 2024 and sell it today you would earn a total of 169.00 from holding GSTechnologies or generate 119.86% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.0% |
| Values | Daily Returns |
GSTechnologies vs. ONEOK Inc
Performance |
| Timeline |
| GSTechnologies |
| ONEOK Inc |
GSTechnologies and ONEOK Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GSTechnologies and ONEOK
The main advantage of trading using opposite GSTechnologies and ONEOK positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GSTechnologies position performs unexpectedly, ONEOK 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 ONEOK will offset losses from the drop in ONEOK's long position.| GSTechnologies vs. Cardinal Health | GSTechnologies vs. Mobile Tornado Group | GSTechnologies vs. Infrastrutture Wireless Italiane | GSTechnologies vs. Spirent Communications plc |
| ONEOK vs. Roadside Real Estate | ONEOK vs. Gamma Communications PLC | ONEOK vs. Batm Advanced Communications | ONEOK vs. Martin Marietta Materials |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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