Correlation Between GBT Technologies and Digital China
Can any of the company-specific risk be diversified away by investing in both GBT Technologies and Digital China 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 GBT Technologies and Digital China into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GBT Technologies and Digital China Holdings, you can compare the effects of market volatilities on GBT Technologies and Digital China 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 GBT Technologies with a short position of Digital China. Check out your portfolio center. Please also check ongoing floating volatility patterns of GBT Technologies and Digital China.
Diversification Opportunities for GBT Technologies and Digital China
0.21 | Correlation Coefficient |
Modest diversification
The 3 months correlation between GBT and Digital is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding GBT Technologies and Digital China Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Digital China Holdings and GBT Technologies 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 GBT Technologies are associated (or correlated) with Digital China. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Digital China Holdings has no effect on the direction of GBT Technologies i.e., GBT Technologies and Digital China go up and down completely randomly.
Pair Corralation between GBT Technologies and Digital China
Given the investment horizon of 90 days GBT Technologies is expected to generate 57.57 times more return on investment than Digital China. However, GBT Technologies is 57.57 times more volatile than Digital China Holdings. It trades about 0.28 of its potential returns per unit of risk. Digital China Holdings is currently generating about 0.3 per unit of risk. If you would invest 0.01 in GBT Technologies on September 4, 2024 and sell it today you would earn a total of 0.00 from holding GBT Technologies or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
GBT Technologies vs. Digital China Holdings
Performance |
| Timeline |
| GBT Technologies |
| Digital China Holdings |
GBT Technologies and Digital China Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GBT Technologies and Digital China
The main advantage of trading using opposite GBT Technologies and Digital China positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GBT Technologies position performs unexpectedly, Digital China 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 Digital China will offset losses from the drop in Digital China's long position.| GBT Technologies vs. SEATech Ventures Corp | GBT Technologies vs. Alternet Systems | GBT Technologies vs. Crypto Co | GBT Technologies vs. Xalles Holdings |
| Digital China vs. Global Develpmts | Digital China vs. Parsons Corp | Digital China vs. GBT Technologies | Digital China vs. Appen 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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