Correlation Between GM Breweries and Le Travenues

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

By analyzing existing cross correlation between GM Breweries Limited and Le Travenues Technology, you can compare the effects of market volatilities on GM Breweries and Le Travenues 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 GM Breweries with a short position of Le Travenues. Check out your portfolio center. Please also check ongoing floating volatility patterns of GM Breweries and Le Travenues.

Diversification Opportunities for GM Breweries and Le Travenues

0.62

Correlation Coefficient

GM Breweries  Le Travenues

Poor diversification

The 3 months correlation between GMBREW and IXIGO is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding GM Breweries Limited and Le Travenues Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Le Travenues Technology and GM Breweries 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 GM Breweries Limited are associated (or correlated) with Le Travenues. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Le Travenues Technology has no effect on the direction of GM Breweries i.e., GM Breweries and Le Travenues go up and down completely randomly.

Pair Corralation between GM Breweries and Le Travenues

Assuming the 90 days trading horizon GM Breweries is expected to generate 5.22 times less return on investment than Le Travenues. But when comparing it to its historical volatility, GM Breweries Limited is 1.67 times less risky than Le Travenues. It trades about 0.07 of its potential returns per unit of risk. Le Travenues Technology is currently generating about 0.21 of returns per unit of risk over similar time horizon. If you would invest  15,001  in Le Travenues Technology on April 25, 2025 and sell it today you would earn a total of  7,206  from holding Le Travenues Technology or generate 48.04% return on investment over 90 days.

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

GM Breweries Limited  vs.  Le Travenues Technology

GM Breweries Limited

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in GM Breweries Limited are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite somewhat uncertain basic indicators, GM Breweries may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Le Travenues Technology

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Le Travenues Technology are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. In spite of very weak forward indicators, Le Travenues displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with GM Breweries and Le Travenues

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

The idea behind GM Breweries Limited and Le Travenues Technology 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 CEOs Directory module to screen CEOs from public companies around the world.