Correlation Between GSE Systems and OLB
Can any of the company-specific risk be diversified away by investing in both GSE Systems and OLB 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 GSE Systems and OLB into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GSE Systems and OLB Group, you can compare the effects of market volatilities on GSE Systems and OLB 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 GSE Systems with a short position of OLB. Check out your portfolio center. Please also check ongoing floating volatility patterns of GSE Systems and OLB.
Diversification Opportunities for GSE Systems and OLB
-0.32 | Correlation Coefficient |
Very good diversification
The 3 months correlation between GSE and OLB is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding GSE Systems and OLB Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on OLB Group and GSE Systems 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 GSE Systems are associated (or correlated) with OLB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of OLB Group has no effect on the direction of GSE Systems i.e., GSE Systems and OLB go up and down completely randomly.
Pair Corralation between GSE Systems and OLB
Considering the 90-day investment horizon GSE Systems is expected to generate 0.85 times more return on investment than OLB. However, GSE Systems is 1.18 times less risky than OLB. It trades about 0.04 of its potential returns per unit of risk. OLB Group is currently generating about -0.03 per unit of risk. If you would invest 416.00 in GSE Systems on September 1, 2024 and sell it today you would earn a total of 43.00 from holding GSE Systems or generate 10.34% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 84.92% |
| Values | Daily Returns |
GSE Systems vs. OLB Group
Performance |
| Timeline |
| GSE Systems |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Solid
| OLB Group |
GSE Systems and OLB Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GSE Systems and OLB
The main advantage of trading using opposite GSE Systems and OLB positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GSE Systems position performs unexpectedly, OLB 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 OLB will offset losses from the drop in OLB's long position.| GSE Systems vs. LifeSpeak | GSE Systems vs. RenoWorks Software | GSE Systems vs. 01 Communique Laboratory | GSE Systems vs. RESAAS Services |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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