Correlation Between Gran Tierra and Hot Mamas

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Can any of the company-specific risk be diversified away by investing in both Gran Tierra and Hot Mamas 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 Gran Tierra and Hot Mamas into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Gran Tierra Energy and Hot Mamas Foods, you can compare the effects of market volatilities on Gran Tierra and Hot Mamas 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 Gran Tierra with a short position of Hot Mamas. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gran Tierra and Hot Mamas.

Diversification Opportunities for Gran Tierra and Hot Mamas

0.0
  Correlation Coefficient

Pay attention - limited upside

The 3 months correlation between Gran and Hot is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Gran Tierra Energy and Hot Mamas Foods in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hot Mamas Foods and Gran Tierra 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 Gran Tierra Energy are associated (or correlated) with Hot Mamas. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hot Mamas Foods has no effect on the direction of Gran Tierra i.e., Gran Tierra and Hot Mamas go up and down completely randomly.

Pair Corralation between Gran Tierra and Hot Mamas

If you would invest  539.00  in Gran Tierra Energy on December 29, 2023 and sell it today you would earn a total of  175.00  from holding Gran Tierra Energy or generate 32.47% return on investment over 90 days.
Time Period3 Months [change]
DirectionFlat 
StrengthInsignificant
Accuracy0.0%
ValuesDaily Returns

Gran Tierra Energy  vs.  Hot Mamas Foods

 Performance 
       Timeline  
Gran Tierra Energy 

Risk-Adjusted Performance

11 of 100

 
Low
 
High
OK
Compared to the overall equity markets, risk-adjusted returns on investments in Gran Tierra Energy are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of rather fragile basic indicators, Gran Tierra exhibited solid returns over the last few months and may actually be approaching a breakup point.
Hot Mamas Foods 

Risk-Adjusted Performance

0 of 100

 
Low
 
High
Very Weak
Over the last 90 days Hot Mamas Foods has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Hot Mamas is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Gran Tierra and Hot Mamas Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Gran Tierra and Hot Mamas

The main advantage of trading using opposite Gran Tierra and Hot Mamas positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gran Tierra position performs unexpectedly, Hot Mamas 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 Hot Mamas will offset losses from the drop in Hot Mamas' long position.
The idea behind Gran Tierra Energy and Hot Mamas Foods 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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.

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