Correlation Between Skillz Platform and GD Culture

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Can any of the company-specific risk be diversified away by investing in both Skillz Platform and GD Culture 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 Skillz Platform and GD Culture into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Skillz Platform and GD Culture Group, you can compare the effects of market volatilities on Skillz Platform and GD Culture 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 Skillz Platform with a short position of GD Culture. Check out your portfolio center. Please also check ongoing floating volatility patterns of Skillz Platform and GD Culture.

Diversification Opportunities for Skillz Platform and GD Culture

-0.33
  Correlation Coefficient

Very good diversification

The 3 months correlation between Skillz and GDC is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding Skillz Platform and GD Culture Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GD Culture Group and Skillz Platform 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 Skillz Platform are associated (or correlated) with GD Culture. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GD Culture Group has no effect on the direction of Skillz Platform i.e., Skillz Platform and GD Culture go up and down completely randomly.

Pair Corralation between Skillz Platform and GD Culture

Given the investment horizon of 90 days Skillz Platform is expected to under-perform the GD Culture. But the stock apears to be less risky and, when comparing its historical volatility, Skillz Platform is 9.49 times less risky than GD Culture. The stock trades about -0.01 of its potential returns per unit of risk. The GD Culture Group is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  385.00  in GD Culture Group on November 1, 2024 and sell it today you would lose (244.00) from holding GD Culture Group or give up 63.38% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy99.8%
ValuesDaily Returns

Skillz Platform  vs.  GD Culture Group

 Performance 
       Timeline  
Skillz Platform 

Risk-Adjusted Performance

7 of 100

 
Weak
 
Strong
OK
Compared to the overall equity markets, risk-adjusted returns on investments in Skillz Platform are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of fairly inconsistent essential indicators, Skillz Platform showed solid returns over the last few months and may actually be approaching a breakup point.
GD Culture Group 

Risk-Adjusted Performance

2 of 100

 
Weak
 
Strong
Weak
Compared to the overall equity markets, risk-adjusted returns on investments in GD Culture Group are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of rather unfluctuating fundamental indicators, GD Culture exhibited solid returns over the last few months and may actually be approaching a breakup point.

Skillz Platform and GD Culture Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Skillz Platform and GD Culture

The main advantage of trading using opposite Skillz Platform and GD Culture positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Skillz Platform position performs unexpectedly, GD Culture 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 GD Culture will offset losses from the drop in GD Culture's long position.
The idea behind Skillz Platform and GD Culture Group 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.
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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