Correlation Between Gunkul Engineering and I Tail

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

By analyzing existing cross correlation between Gunkul Engineering Public and i Tail Corp PCL, you can compare the effects of market volatilities on Gunkul Engineering and I Tail 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 Gunkul Engineering with a short position of I Tail. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gunkul Engineering and I Tail.

Diversification Opportunities for Gunkul Engineering and I Tail

0.45

Correlation Coefficient

Gunkul Engineering  I Tail

Very weak diversification

The 3 months correlation between Gunkul and ITC is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding Gunkul Engineering Public and i Tail Corp PCL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on i Tail Corp and Gunkul Engineering 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 Gunkul Engineering Public are associated (or correlated) with I Tail. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of i Tail Corp has no effect on the direction of Gunkul Engineering i.e., Gunkul Engineering and I Tail go up and down completely randomly.

Pair Corralation between Gunkul Engineering and I Tail

Assuming the 90 days trading horizon Gunkul Engineering is expected to generate 4.78 times less return on investment than I Tail. In addition to that, Gunkul Engineering is 1.1 times more volatile than i Tail Corp PCL. It trades about 0.0 of its total potential returns per unit of risk. i Tail Corp PCL is currently generating about 0.02 per unit of volatility. If you would invest  1,976  in i Tail Corp PCL on September 5, 2024 and sell it today you would earn a total of  114.00  from holding i Tail Corp PCL or generate 5.77% return on investment over 90 days.

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

Gunkul Engineering Public  vs.  i Tail Corp PCL

Gunkul Engineering Public

Risk-Adjusted Performance

0 of 100

Very Weak

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

i Tail Corp

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in i Tail Corp PCL are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite quite persistent fundamental indicators, I Tail is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

Pair Trading with Gunkul Engineering and I Tail

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

The idea behind Gunkul Engineering Public and i Tail Corp PCL 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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.