Correlation Between GPT and Expat Czech

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

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

Diversification Opportunities for GPT and Expat Czech

0.69

Correlation Coefficient

GPT  Expat Czech

Poor diversification

The 3 months correlation between GPT and Expat is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding GPT Group and Expat Czech PX in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Expat Czech PX and GPT 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 GPT Group are associated (or correlated) with Expat Czech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Expat Czech PX has no effect on the direction of GPT i.e., GPT and Expat Czech go up and down completely randomly.

Pair Corralation between GPT and Expat Czech

Assuming the 90 days horizon GPT Group is expected to generate 2.89 times more return on investment than Expat Czech. However, GPT is 2.89 times more volatile than Expat Czech PX. It trades about 0.12 of its potential returns per unit of risk. Expat Czech PX is currently generating about 0.17 per unit of risk. If you would invest  240.00  in GPT Group on April 23, 2025 and sell it today you would earn a total of  39.00  from holding GPT Group or generate 16.25% return on investment over 90 days.

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

GPT Group  vs.  Expat Czech PX

GPT Group

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in GPT Group are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, GPT reported solid returns over the last few months and may actually be approaching a breakup point.

Expat Czech PX

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Expat Czech PX are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively fragile basic indicators, Expat Czech may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Pair Trading with GPT and Expat Czech

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

The idea behind GPT Group and Expat Czech PX 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.