Correlation Between G Tec and NIFTY SUMER

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Can any of the company-specific risk be diversified away by investing in both G Tec and NIFTY SUMER 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 G Tec and NIFTY SUMER into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between G Tec Jainx Education and NIFTY SUMER DURABLES, you can compare the effects of market volatilities on G Tec and NIFTY SUMER 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 G Tec with a short position of NIFTY SUMER. Check out your portfolio center. Please also check ongoing floating volatility patterns of G Tec and NIFTY SUMER.

Diversification Opportunities for G Tec and NIFTY SUMER

-0.02

Correlation Coefficient

G Tec

NIFTY SUMER

Good diversification

The 3 months correlation between GTECJAINX and NIFTY is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding G Tec Jainx Education and NIFTY SUMER DURABLES in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NIFTY SUMER DURABLES and G Tec 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 G Tec Jainx Education are associated (or correlated) with NIFTY SUMER. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NIFTY SUMER DURABLES has no effect on the direction of G Tec i.e., G Tec and NIFTY SUMER go up and down completely randomly.

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Pair Corralation between G Tec and NIFTY SUMER

Assuming the 90 days trading horizon G Tec Jainx Education is expected to generate 2.17 times more return on investment than NIFTY SUMER. However, G Tec is 2.17 times more volatile than NIFTY SUMER DURABLES. It trades about 0.0 of its potential returns per unit of risk. NIFTY SUMER DURABLES is currently generating about -0.29 per unit of risk. If you would invest 3,680 in G Tec Jainx Education on October 25, 2024 and sell it today you would lose (43.00) from holding G Tec Jainx Education or give up 1.17% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

G Tec Jainx Education vs. NIFTY SUMER DURABLES

Performance

Timeline

G Tec and NIFTY SUMER Volatility Contrast

Predicted Return Density

Returns

G Tec Jainx Education

Pair trading matchups for G Tec

	G Tec vs. Aptech Limited
	G Tec vs. CL Educate Limited
	G Tec vs. Global Education Limited
	G Tec vs. Zee Learn Limited

NIFTY SUMER DURABLES

Pair trading matchups for NIFTY SUMER

	NIFTY SUMER vs. Pilani Investment and
	NIFTY SUMER vs. G Tec Jainx Education
	NIFTY SUMER vs. Tata Investment
	NIFTY SUMER vs. Mangalam Drugs And

Pair Trading with G Tec and NIFTY SUMER

The main advantage of trading using opposite G Tec and NIFTY SUMER positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if G Tec position performs unexpectedly, NIFTY SUMER 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 NIFTY SUMER will offset losses from the drop in NIFTY SUMER's long position.

	G Tec vs. Aptech Limited
	G Tec vs. CL Educate Limited
	G Tec vs. Global Education Limited
	G Tec vs. Zee Learn Limited

The idea behind G Tec Jainx Education and NIFTY SUMER DURABLES 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.

	NIFTY SUMER vs. Pilani Investment and
	NIFTY SUMER vs. G Tec Jainx Education
	NIFTY SUMER vs. Tata Investment
	NIFTY SUMER vs. Mangalam Drugs And

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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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.

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