Correlation Between GX AI and Livetech

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

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

Diversification Opportunities for GX AI and Livetech

-0.96

Correlation Coefficient

GX AI  Livetech

Pay attention - limited upside

The 3 months correlation between BAIQ39 and Livetech is -0.96. Overlapping area represents the amount of risk that can be diversified away by holding GX AI TECH and Livetech da Bahia in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Livetech da Bahia and GX AI 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 GX AI TECH are associated (or correlated) with Livetech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Livetech da Bahia has no effect on the direction of GX AI i.e., GX AI and Livetech go up and down completely randomly.

Pair Corralation between GX AI and Livetech

Assuming the 90 days trading horizon GX AI TECH is expected to generate 0.62 times more return on investment than Livetech. However, GX AI TECH is 1.6 times less risky than Livetech. It trades about 0.15 of its potential returns per unit of risk. Livetech da Bahia is currently generating about -0.07 per unit of risk. If you would invest  5,047  in GX AI TECH on September 19, 2024 and sell it today you would earn a total of  3,155  from holding GX AI TECH or generate 62.51% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Significant
Accuracy	91.97%
Values	Daily Returns

GX AI TECH  vs.  Livetech da Bahia

GX AI TECH

Risk-Adjusted Performance

24 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in GX AI TECH are ranked lower than 24 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak forward indicators, GX AI sustained solid returns over the last few months and may actually be approaching a breakup point.

Livetech da Bahia

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Livetech da Bahia has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in January 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with GX AI and Livetech

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

The idea behind GX AI TECH and Livetech da Bahia 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.