Correlation Between GBS Software and Forsys Metals
Can any of the company-specific risk be diversified away by investing in both GBS Software and Forsys Metals 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 GBS Software and Forsys Metals into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GBS Software AG and Forsys Metals Corp, you can compare the effects of market volatilities on GBS Software and Forsys Metals 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 GBS Software with a short position of Forsys Metals. Check out your portfolio center. Please also check ongoing floating volatility patterns of GBS Software and Forsys Metals.
Diversification Opportunities for GBS Software and Forsys Metals
0.25 | Correlation Coefficient |
Modest diversification
The 3 months correlation between GBS and Forsys is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding GBS Software AG and Forsys Metals Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Forsys Metals Corp and GBS Software 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 GBS Software AG are associated (or correlated) with Forsys Metals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Forsys Metals Corp has no effect on the direction of GBS Software i.e., GBS Software and Forsys Metals go up and down completely randomly.
Pair Corralation between GBS Software and Forsys Metals
Assuming the 90 days trading horizon GBS Software is expected to generate 1.09 times less return on investment than Forsys Metals. But when comparing it to its historical volatility, GBS Software AG is 2.19 times less risky than Forsys Metals. It trades about 0.3 of its potential returns per unit of risk. Forsys Metals Corp is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest 42.00 in Forsys Metals Corp on October 12, 2024 and sell it today you would earn a total of 6.00 from holding Forsys Metals Corp or generate 14.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
GBS Software AG vs. Forsys Metals Corp
Performance |
| Timeline |
| GBS Software AG |
| Forsys Metals Corp |
GBS Software and Forsys Metals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GBS Software and Forsys Metals
The main advantage of trading using opposite GBS Software and Forsys Metals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GBS Software position performs unexpectedly, Forsys Metals 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 Forsys Metals will offset losses from the drop in Forsys Metals' long position.| GBS Software vs. Taiwan Semiconductor Manufacturing | GBS Software vs. MAGNUM MINING EXP | GBS Software vs. MCEWEN MINING INC | GBS Software vs. GREENX METALS LTD |
| Forsys Metals vs. GBS Software AG | Forsys Metals vs. Alfa Financial Software | Forsys Metals vs. Wayside Technology Group | Forsys Metals vs. Beta Systems Software |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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