Correlation Between GACM Technologies and Navin Fluorine

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

By analyzing existing cross correlation between GACM Technologies Limited and Navin Fluorine International, you can compare the effects of market volatilities on GACM Technologies and Navin Fluorine 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 GACM Technologies with a short position of Navin Fluorine. Check out your portfolio center. Please also check ongoing floating volatility patterns of GACM Technologies and Navin Fluorine.

Diversification Opportunities for GACM Technologies and Navin Fluorine

-0.28

Correlation Coefficient

GACM Technologies  Navin Fluorine

Very good diversification

The 3 months correlation between GACM and Navin is -0.28. Overlapping area represents the amount of risk that can be diversified away by holding GACM Technologies Limited and Navin Fluorine International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Navin Fluorine Inter and GACM Technologies 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 GACM Technologies Limited are associated (or correlated) with Navin Fluorine. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Navin Fluorine Inter has no effect on the direction of GACM Technologies i.e., GACM Technologies and Navin Fluorine go up and down completely randomly.

Pair Corralation between GACM Technologies and Navin Fluorine

Assuming the 90 days trading horizon GACM Technologies Limited is expected to under-perform the Navin Fluorine. In addition to that, GACM Technologies is 1.68 times more volatile than Navin Fluorine International. It trades about -0.12 of its total potential returns per unit of risk. Navin Fluorine International is currently generating about 0.08 per unit of volatility. If you would invest  326,897  in Navin Fluorine International on September 15, 2024 and sell it today you would earn a total of  28,863  from holding Navin Fluorine International or generate 8.83% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.41%
Values	Daily Returns

GACM Technologies Limited  vs.  Navin Fluorine International

GACM Technologies

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days GACM Technologies Limited has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of conflicting performance in the last few months, the Stock's fundamental indicators remain rather sound which may send shares a bit higher in January 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Navin Fluorine Inter

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Navin Fluorine International are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite quite uncertain basic indicators, Navin Fluorine may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with GACM Technologies and Navin Fluorine

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

The idea behind GACM Technologies Limited and Navin Fluorine International 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.