Correlation Between GCS Holdings and Provision Information

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

By analyzing existing cross correlation between GCS Holdings and Provision Information CoLtd, you can compare the effects of market volatilities on GCS Holdings and Provision Information 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 GCS Holdings with a short position of Provision Information. Check out your portfolio center. Please also check ongoing floating volatility patterns of GCS Holdings and Provision Information.

Diversification Opportunities for GCS Holdings and Provision Information

0.15

Correlation Coefficient

GCS Holdings  Provision Information

Average diversification

The 3 months correlation between GCS and Provision is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding GCS Holdings and Provision Information CoLtd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Provision Information and GCS 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 GCS Holdings are associated (or correlated) with Provision Information. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Provision Information has no effect on the direction of GCS Holdings i.e., GCS Holdings and Provision Information go up and down completely randomly.

Pair Corralation between GCS Holdings and Provision Information

Assuming the 90 days trading horizon GCS Holdings is expected to generate 3.74 times more return on investment than Provision Information. However, GCS Holdings is 3.74 times more volatile than Provision Information CoLtd. It trades about 0.41 of its potential returns per unit of risk. Provision Information CoLtd is currently generating about 0.08 per unit of risk. If you would invest  4,100  in GCS Holdings on September 25, 2024 and sell it today you would earn a total of  9,350  from holding GCS Holdings or generate 228.05% return on investment over 90 days.

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

GCS Holdings  vs.  Provision Information CoLtd

GCS Holdings

Risk-Adjusted Performance

32 of 100

Very Strong

Compared to the overall equity markets, risk-adjusted returns on investments in GCS Holdings are ranked lower than 32 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, GCS Holdings showed solid returns over the last few months and may actually be approaching a breakup point.

Provision Information

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Provision Information CoLtd are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, Provision Information may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with GCS Holdings and Provision Information

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

The idea behind GCS Holdings and Provision Information CoLtd 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.