Correlation Between Galileo Tech and Intelicanna

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

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

Diversification Opportunities for Galileo Tech and Intelicanna

-0.35

Correlation Coefficient

Galileo Tech  Intelicanna

Very good diversification

The 3 months correlation between Galileo and Intelicanna is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding Galileo Tech and Intelicanna in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Intelicanna and Galileo Tech 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 Galileo Tech are associated (or correlated) with Intelicanna. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Intelicanna has no effect on the direction of Galileo Tech i.e., Galileo Tech and Intelicanna go up and down completely randomly.

Pair Corralation between Galileo Tech and Intelicanna

Assuming the 90 days trading horizon Galileo Tech is expected to under-perform the Intelicanna. But the stock apears to be less risky and, when comparing its historical volatility, Galileo Tech is 1.03 times less risky than Intelicanna. The stock trades about -0.12 of its potential returns per unit of risk. The Intelicanna is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest  5,270  in Intelicanna on September 16, 2024 and sell it today you would earn a total of  330.00  from holding Intelicanna or generate 6.26% return on investment over 90 days.

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

Galileo Tech  vs.  Intelicanna

Galileo Tech

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Galileo Tech has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Intelicanna

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Intelicanna are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Intelicanna sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Galileo Tech and Intelicanna

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

The idea behind Galileo Tech and Intelicanna 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 Transaction History module to view history of all your transactions and understand their impact on performance.