Correlation Between GT and STOX

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

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

Diversification Opportunities for GT and STOX

-0.47

Correlation Coefficient

GT  STOX

Very good diversification

The 3 months correlation between GT and STOX is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding GT and STOX in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on STOX and GT 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 GT are associated (or correlated) with STOX. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of STOX has no effect on the direction of GT i.e., GT and STOX go up and down completely randomly.

Pair Corralation between GT and STOX

Assuming the 90 days horizon GT is expected to under-perform the STOX. But the crypto coin apears to be less risky and, when comparing its historical volatility, GT is 1.97 times less risky than STOX. The crypto coin trades about -0.17 of its potential returns per unit of risk. The STOX is currently generating about 0.27 of returns per unit of risk over similar time horizon. If you would invest  0.19  in STOX on April 24, 2025 and sell it today you would earn a total of  0.20  from holding STOX or generate 103.91% return on investment over 90 days.

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

GT  vs.  STOX

GT

Risk-Adjusted Performance

Very Weak

Over the last 90 days GT 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 GT shareholders.

STOX

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in STOX are ranked lower than 20 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady fundamental indicators, STOX exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with GT and STOX

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

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