Correlation Between GQG Partners and Ironbark Capital

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

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

Diversification Opportunities for GQG Partners and Ironbark Capital

0.35

Correlation Coefficient

GQG Partners  Ironbark Capital

Weak diversification

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

Pair Corralation between GQG Partners and Ironbark Capital

Assuming the 90 days trading horizon GQG Partners DRC is expected to under-perform the Ironbark Capital. In addition to that, GQG Partners is 6.09 times more volatile than Ironbark Capital. It trades about -0.15 of its total potential returns per unit of risk. Ironbark Capital is currently generating about 0.0 per unit of volatility. If you would invest  46.00  in Ironbark Capital on September 4, 2024 and sell it today you would earn a total of  0.00  from holding Ironbark Capital or generate 0.0% return on investment over 90 days.

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

GQG Partners DRC  vs.  Ironbark Capital

GQG Partners DRC

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days GQG Partners DRC has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's technical and fundamental indicators remain comparatively stable which may send shares a bit higher in January 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Ironbark Capital

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Ironbark Capital are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable fundamental indicators, Ironbark Capital is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with GQG Partners and Ironbark Capital

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

The idea behind GQG Partners DRC and Ironbark Capital 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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.