Correlation Between GS Chain and Hardide PLC

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

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

Diversification Opportunities for GS Chain and Hardide PLC

-0.6

Correlation Coefficient

GS Chain  Hardide PLC

Excellent diversification

The 3 months correlation between GSC and Hardide is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding GS Chain PLC and Hardide PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hardide PLC and GS Chain 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 GS Chain PLC are associated (or correlated) with Hardide PLC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hardide PLC has no effect on the direction of GS Chain i.e., GS Chain and Hardide PLC go up and down completely randomly.

Pair Corralation between GS Chain and Hardide PLC

Assuming the 90 days trading horizon GS Chain PLC is expected to generate 40.81 times more return on investment than Hardide PLC. However, GS Chain is 40.81 times more volatile than Hardide PLC. It trades about 0.11 of its potential returns per unit of risk. Hardide PLC is currently generating about 0.18 per unit of risk. If you would invest  60.00  in GS Chain PLC on April 23, 2025 and sell it today you would lose (15.00) from holding GS Chain PLC or give up 25.0% of portfolio value over 90 days.

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

GS Chain PLC  vs.  Hardide PLC

GS Chain PLC

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in GS Chain PLC are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of rather uncertain technical and fundamental indicators, GS Chain exhibited solid returns over the last few months and may actually be approaching a breakup point.

Hardide PLC

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Hardide PLC are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. In spite of rather uncertain technical and fundamental indicators, Hardide PLC exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with GS Chain and Hardide PLC

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

The idea behind GS Chain PLC and Hardide PLC 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.