Correlation Between GTT Communications and ICOA

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

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

Diversification Opportunities for GTT Communications and ICOA

0.0

Correlation Coefficient

GTT Communications  ICOA

Pay attention - limited upside

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

Pair Corralation between GTT Communications and ICOA

If you would invest  0.03  in ICOA Inc on January 19, 2024 and sell it today you would lose (0.02) from holding ICOA Inc or give up 66.67% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	1.61%
Values	Daily Returns

GTT Communications  vs.  ICOA Inc

GTT Communications

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days GTT Communications has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, GTT Communications is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

ICOA Inc

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in ICOA Inc are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, ICOA sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with GTT Communications and ICOA

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

The idea behind GTT Communications and ICOA Inc 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 Commodity Directory module to find actively traded commodities issued by global exchanges.