Correlation Between WA1 Resources and Gtn

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Can any of the company-specific risk be diversified away by investing in both WA1 Resources 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 WA1 Resources and Gtn into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between WA1 Resources and Gtn, you can compare the effects of market volatilities on WA1 Resources 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 WA1 Resources with a short position of Gtn. Check out your portfolio center. Please also check ongoing floating volatility patterns of WA1 Resources and Gtn.

Diversification Opportunities for WA1 Resources and Gtn

-0.1
  Correlation Coefficient

Good diversification

The 3 months correlation between WA1 and Gtn is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding WA1 Resources and Gtn in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gtn and WA1 Resources 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 WA1 Resources 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 WA1 Resources i.e., WA1 Resources and Gtn go up and down completely randomly.

Pair Corralation between WA1 Resources and Gtn

Assuming the 90 days trading horizon WA1 Resources is expected to generate 1.8 times less return on investment than Gtn. But when comparing it to its historical volatility, WA1 Resources is 1.59 times less risky than Gtn. It trades about 0.16 of its potential returns per unit of risk. Gtn is currently generating about 0.19 of returns per unit of risk over similar time horizon. If you would invest  47.00  in Gtn on September 12, 2024 and sell it today you would earn a total of  10.00  from holding Gtn or generate 21.28% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

WA1 Resources  vs.  Gtn

 Performance 
       Timeline  
WA1 Resources 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days WA1 Resources has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, WA1 Resources is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.
Gtn 

Risk-Adjusted Performance

8 of 100

 
Weak
 
Strong
OK
Compared to the overall equity markets, risk-adjusted returns on investments in Gtn are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Gtn unveiled solid returns over the last few months and may actually be approaching a breakup point.

WA1 Resources and Gtn Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with WA1 Resources and Gtn

The main advantage of trading using opposite WA1 Resources and Gtn positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if WA1 Resources 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.
The idea behind WA1 Resources and Gtn 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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.

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