Correlation Between Gatechain Token and RedStone

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

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

Diversification Opportunities for Gatechain Token and RedStone

0.86

Correlation Coefficient

Gatechain Token  RedStone

Very poor diversification

The 3 months correlation between Gatechain and RedStone is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Gatechain Token and RedStone in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on RedStone and Gatechain Token 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 Gatechain Token are associated (or correlated) with RedStone. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of RedStone has no effect on the direction of Gatechain Token i.e., Gatechain Token and RedStone go up and down completely randomly.

Pair Corralation between Gatechain Token and RedStone

Assuming the 90 days horizon Gatechain Token is expected to under-perform the RedStone. But the crypto coin apears to be less risky and, when comparing its historical volatility, Gatechain Token is 2.58 times less risky than RedStone. The crypto coin trades about -0.23 of its potential returns per unit of risk. The RedStone is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest  40.00  in RedStone on April 20, 2025 and sell it today you would lose (5.00) from holding RedStone or give up 12.5% of portfolio value over 90 days.

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

Gatechain Token  vs.  RedStone

Gatechain Token

Risk-Adjusted Performance

Very Weak

Over the last 90 days Gatechain Token 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 fundamental indicators remain rather sound which may send shares a bit higher in August 2025. The latest tumult may also be a sign of longer-term up-swing for Gatechain Token shareholders.

RedStone

Risk-Adjusted Performance

Very Weak

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

Pair Trading with Gatechain Token and RedStone

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

The idea behind Gatechain Token and RedStone 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.

Check out your portfolio center.

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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.