Correlation Between GEK TERNA and Public Power

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

By analyzing existing cross correlation between GEK TERNA Holdings and Public Power, you can compare the effects of market volatilities on GEK TERNA and Public Power 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 GEK TERNA with a short position of Public Power. Check out your portfolio center. Please also check ongoing floating volatility patterns of GEK TERNA and Public Power.

Diversification Opportunities for GEK TERNA and Public Power

0.84

Correlation Coefficient

GEK TERNA  Public Power

Very poor diversification

The 3 months correlation between GEK and Public is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding GEK TERNA Holdings and Public Power in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Public Power and GEK TERNA 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 GEK TERNA Holdings are associated (or correlated) with Public Power. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Public Power has no effect on the direction of GEK TERNA i.e., GEK TERNA and Public Power go up and down completely randomly.

Pair Corralation between GEK TERNA and Public Power

Assuming the 90 days trading horizon GEK TERNA Holdings is expected to generate 0.86 times more return on investment than Public Power. However, GEK TERNA Holdings is 1.16 times less risky than Public Power. It trades about 0.2 of its potential returns per unit of risk. Public Power is currently generating about 0.1 per unit of risk. If you would invest  1,849  in GEK TERNA Holdings on April 24, 2025 and sell it today you would earn a total of  261.00  from holding GEK TERNA Holdings or generate 14.12% return on investment over 90 days.

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

GEK TERNA Holdings  vs.  Public Power

GEK TERNA Holdings

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in GEK TERNA Holdings are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. In spite of very weak technical and fundamental indicators, GEK TERNA displayed solid returns over the last few months and may actually be approaching a breakup point.

Public Power

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Public Power are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak fundamental indicators, Public Power may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Pair Trading with GEK TERNA and Public Power

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

The idea behind GEK TERNA Holdings and Public Power 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.