Correlation Between GTM Holdings and Advancetek Enterprise

Can any of the company-specific risk be diversified away by investing in both GTM Holdings and Advancetek Enterprise 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 GTM Holdings and Advancetek Enterprise into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between GTM Holdings Corp and Advancetek Enterprise Co, you can compare the effects of market volatilities on GTM Holdings and Advancetek Enterprise 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 GTM Holdings with a short position of Advancetek Enterprise. Check out your portfolio center. Please also check ongoing floating volatility patterns of GTM Holdings and Advancetek Enterprise.

Diversification Opportunities for GTM Holdings and Advancetek Enterprise

-0.11

Correlation Coefficient

GTM Holdings  Advancetek Enterprise

Good diversification

The 3 months correlation between GTM and Advancetek is -0.11. Overlapping area represents the amount of risk that can be diversified away by holding GTM Holdings Corp and Advancetek Enterprise Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Advancetek Enterprise and GTM Holdings 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 GTM Holdings Corp are associated (or correlated) with Advancetek Enterprise. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Advancetek Enterprise has no effect on the direction of GTM Holdings i.e., GTM Holdings and Advancetek Enterprise go up and down completely randomly.

Pair Corralation between GTM Holdings and Advancetek Enterprise

Assuming the 90 days trading horizon GTM Holdings Corp is expected to under-perform the Advancetek Enterprise. But the stock apears to be less risky and, when comparing its historical volatility, GTM Holdings Corp is 4.52 times less risky than Advancetek Enterprise. The stock trades about -0.03 of its potential returns per unit of risk. The Advancetek Enterprise Co is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest  6,140  in Advancetek Enterprise Co on September 4, 2024 and sell it today you would earn a total of  1,980  from holding Advancetek Enterprise Co or generate 32.25% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

GTM Holdings Corp  vs.  Advancetek Enterprise Co

GTM Holdings Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days GTM Holdings Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, GTM Holdings is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Advancetek Enterprise

Risk-Adjusted Performance

12 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Advancetek Enterprise Co are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, Advancetek Enterprise showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with GTM Holdings and Advancetek Enterprise

The main advantage of trading using opposite GTM Holdings and Advancetek Enterprise positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GTM Holdings position performs unexpectedly, Advancetek Enterprise 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 Advancetek Enterprise will offset losses from the drop in Advancetek Enterprise's long position.

The idea behind GTM Holdings Corp and Advancetek Enterprise Co 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.

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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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.