Correlation Between GTL and Akums Drugs
Can any of the company-specific risk be diversified away by investing in both GTL and Akums Drugs 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 GTL and Akums Drugs into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GTL Limited and Akums Drugs and, you can compare the effects of market volatilities on GTL and Akums Drugs 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 GTL with a short position of Akums Drugs. Check out your portfolio center. Please also check ongoing floating volatility patterns of GTL and Akums Drugs.
Diversification Opportunities for GTL and Akums Drugs
0.59 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between GTL and Akums is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding GTL Limited and Akums Drugs and in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Akums Drugs and GTL 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 GTL Limited are associated (or correlated) with Akums Drugs. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Akums Drugs has no effect on the direction of GTL i.e., GTL and Akums Drugs go up and down completely randomly.
Pair Corralation between GTL and Akums Drugs
Assuming the 90 days trading horizon GTL Limited is expected to generate 1.43 times more return on investment than Akums Drugs. However, GTL is 1.43 times more volatile than Akums Drugs and. It trades about 0.0 of its potential returns per unit of risk. Akums Drugs and is currently generating about -0.14 per unit of risk. If you would invest 1,373 in GTL Limited on September 2, 2024 and sell it today you would lose (86.00) from holding GTL Limited or give up 6.26% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
GTL Limited vs. Akums Drugs and
Performance |
| Timeline |
| GTL Limited |
| Akums Drugs |
GTL and Akums Drugs Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GTL and Akums Drugs
The main advantage of trading using opposite GTL and Akums Drugs positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GTL position performs unexpectedly, Akums Drugs 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 Akums Drugs will offset losses from the drop in Akums Drugs' long position.| GTL vs. One 97 Communications | GTL vs. Paramount Communications Limited | GTL vs. OnMobile Global Limited | GTL vs. Elin Electronics Limited |
| Akums Drugs vs. Hindustan Foods Limited | Akums Drugs vs. Sportking India Limited | Akums Drugs vs. Varun Beverages Limited | Akums Drugs vs. Univa Foods 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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