Correlation Between Gol Intelligent and Trimble

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

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

Diversification Opportunities for Gol Intelligent and Trimble

0.0

Correlation Coefficient

Gol Intelligent  Trimble

Pay attention - limited upside

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

Pair Corralation between Gol Intelligent and Trimble

If you would invest  5,474  in Trimble on September 27, 2024 and sell it today you would earn a total of  1,348  from holding Trimble or generate 24.63% return on investment over 90 days.

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

Gol Intelligent Airlines  vs.  Trimble

Gol Intelligent Airlines

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Gol Intelligent Airlines has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Gol Intelligent is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Trimble

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Trimble are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Trimble reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Gol Intelligent and Trimble

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

The idea behind Gol Intelligent Airlines and Trimble 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.

Check out your portfolio center.

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.