Correlation Between GSC and Osmosis

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

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

Diversification Opportunities for GSC and Osmosis

0.81

Correlation Coefficient

GSC  Osmosis

Very poor diversification

The 3 months correlation between GSC and Osmosis is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding GSC and Osmosis in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Osmosis and GSC 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 GSC are associated (or correlated) with Osmosis. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Osmosis has no effect on the direction of GSC i.e., GSC and Osmosis go up and down completely randomly.

Pair Corralation between GSC and Osmosis

If you would invest  0.13  in GSC on February 7, 2024 and sell it today you would earn a total of  0.00  from holding GSC or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	1.15%
Values	Daily Returns

GSC  vs.  Osmosis

GSC

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days GSC has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound fundamental indicators, GSC is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Osmosis

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Osmosis has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Crypto's basic indicators remain rather sound which may send shares a bit higher in June 2024. The latest tumult may also be a sign of longer-term up-swing for Osmosis shareholders.

Pair Trading with GSC and Osmosis

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

The idea behind GSC and Osmosis 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.