Correlation Between Carmit and GP Global

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

By analyzing existing cross correlation between Carmit and GP Global Power, you can compare the effects of market volatilities on Carmit and GP Global 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 Carmit with a short position of GP Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Carmit and GP Global.

Diversification Opportunities for Carmit and GP Global

0.0

Correlation Coefficient

Carmit  GP Global

Pay attention - limited upside

The 3 months correlation between Carmit and GPGB is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Carmit and GP Global Power in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GP Global Power and Carmit 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 Carmit are associated (or correlated) with GP Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GP Global Power has no effect on the direction of Carmit i.e., Carmit and GP Global go up and down completely randomly.

Pair Corralation between Carmit and GP Global

If you would invest  117,100  in Carmit on September 24, 2024 and sell it today you would lose (600.00) from holding Carmit or give up 0.51% of portfolio value over 90 days.

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

Carmit  vs.  GP Global Power

Carmit

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Carmit has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Carmit is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

GP Global Power

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days GP Global Power has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, GP Global is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Carmit and GP Global

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

The idea behind Carmit and GP Global Power 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.