Correlation Between Mach7 Technologies and Gtn
Can any of the company-specific risk be diversified away by investing in both Mach7 Technologies and Gtn 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 Mach7 Technologies and Gtn into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mach7 Technologies and Gtn, you can compare the effects of market volatilities on Mach7 Technologies and Gtn 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 Mach7 Technologies with a short position of Gtn. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mach7 Technologies and Gtn.
Diversification Opportunities for Mach7 Technologies and Gtn
0.43 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Mach7 and Gtn is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding Mach7 Technologies and Gtn in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gtn and Mach7 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 Mach7 Technologies are associated (or correlated) with Gtn. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gtn has no effect on the direction of Mach7 Technologies i.e., Mach7 Technologies and Gtn go up and down completely randomly.
Pair Corralation between Mach7 Technologies and Gtn
Assuming the 90 days trading horizon Mach7 Technologies is expected to under-perform the Gtn. In addition to that, Mach7 Technologies is 1.04 times more volatile than Gtn. It trades about -0.01 of its total potential returns per unit of risk. Gtn is currently generating about 0.03 per unit of volatility. If you would invest 38.00 in Gtn on August 30, 2024 and sell it today you would earn a total of 8.00 from holding Gtn or generate 21.05% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mach7 Technologies vs. Gtn
Performance |
| Timeline |
| Mach7 Technologies |
| Gtn |
Mach7 Technologies and Gtn Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mach7 Technologies and Gtn
The main advantage of trading using opposite Mach7 Technologies and Gtn positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mach7 Technologies position performs unexpectedly, Gtn 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 Gtn will offset losses from the drop in Gtn's long position.| Mach7 Technologies vs. Regis Healthcare | Mach7 Technologies vs. Health and Plant | Mach7 Technologies vs. American West Metals | Mach7 Technologies vs. Group 6 Metals |
| Gtn vs. Retail Food Group | Gtn vs. Australian Unity Office | Gtn vs. Homeco Daily Needs | Gtn vs. IDP Education |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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