Correlation Between North East and GMM Grammy

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

By analyzing existing cross correlation between North East Rubbers and GMM Grammy Public, you can compare the effects of market volatilities on North East and GMM Grammy 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 North East with a short position of GMM Grammy. Check out your portfolio center. Please also check ongoing floating volatility patterns of North East and GMM Grammy.

Diversification Opportunities for North East and GMM Grammy

-0.42

Correlation Coefficient

North East  GMM Grammy

Very good diversification

The 3 months correlation between North and GMM is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding North East Rubbers and GMM Grammy Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GMM Grammy Public and North East 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 North East Rubbers are associated (or correlated) with GMM Grammy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GMM Grammy Public has no effect on the direction of North East i.e., North East and GMM Grammy go up and down completely randomly.

Pair Corralation between North East and GMM Grammy

Assuming the 90 days trading horizon North East Rubbers is expected to under-perform the GMM Grammy. In addition to that, North East is 1.13 times more volatile than GMM Grammy Public. It trades about -0.1 of its total potential returns per unit of risk. GMM Grammy Public is currently generating about 0.12 per unit of volatility. If you would invest  735.00  in GMM Grammy Public on September 16, 2024 and sell it today you would earn a total of  75.00  from holding GMM Grammy Public or generate 10.2% return on investment over 90 days.

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

North East Rubbers  vs.  GMM Grammy Public

North East Rubbers

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days North East Rubbers has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest conflicting performance, the Stock's basic indicators remain persistent and the latest mess on Wall Street may also be a sign of long-standing gains for the company institutional investors.

GMM Grammy Public

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in GMM Grammy Public are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite somewhat conflicting basic indicators, GMM Grammy may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with North East and GMM Grammy

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

The idea behind North East Rubbers and GMM Grammy Public 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.