Correlation Between GT Biopharma and Dow Jones
Can any of the company-specific risk be diversified away by investing in both GT Biopharma and Dow Jones 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 GT Biopharma and Dow Jones into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GT Biopharma and Dow Jones Industrial, you can compare the effects of market volatilities on GT Biopharma and Dow Jones 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 GT Biopharma with a short position of Dow Jones. Check out your portfolio center. Please also check ongoing floating volatility patterns of GT Biopharma and Dow Jones.
Diversification Opportunities for GT Biopharma and Dow Jones
-0.16 | Correlation Coefficient |
Good diversification
The 3 months correlation between GTBP and Dow is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding GT Biopharma and Dow Jones Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dow Jones Industrial and GT Biopharma 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 GT Biopharma are associated (or correlated) with Dow Jones. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dow Jones Industrial has no effect on the direction of GT Biopharma i.e., GT Biopharma and Dow Jones go up and down completely randomly.
Pair Corralation between GT Biopharma and Dow Jones
Given the investment horizon of 90 days GT Biopharma is expected to generate 10.8 times more return on investment than Dow Jones. However, GT Biopharma is 10.8 times more volatile than Dow Jones Industrial. It trades about 0.03 of its potential returns per unit of risk. Dow Jones Industrial is currently generating about 0.12 per unit of risk. If you would invest 212.00 in GT Biopharma on November 2, 2024 and sell it today you would lose (6.00) from holding GT Biopharma or give up 2.83% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.04% |
| Values | Daily Returns |
GT Biopharma vs. Dow Jones Industrial
Performance |
| Timeline |
GT Biopharma and Dow Jones Volatility Contrast
Predicted Return Density |
| Returns |
GT Biopharma
Pair trading matchups for GT Biopharma
Dow Jones Industrial
Pair trading matchups for Dow Jones
Pair Trading with GT Biopharma and Dow Jones
The main advantage of trading using opposite GT Biopharma and Dow Jones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GT Biopharma position performs unexpectedly, Dow Jones 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 Dow Jones will offset losses from the drop in Dow Jones' long position.| GT Biopharma vs. Allarity Therapeutics | GT Biopharma vs. Virax Biolabs Group | GT Biopharma vs. Quoin Pharmaceuticals Ltd | GT Biopharma vs. Virpax Pharmaceuticals |
| Dow Jones vs. Boston Properties | Dow Jones vs. Suntory Beverage Food | Dow Jones vs. Envista Holdings Corp | Dow Jones vs. Fevertree Drinks Plc |
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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