Correlation Between Genetec Technology and Alliance Financial
Can any of the company-specific risk be diversified away by investing in both Genetec Technology and Alliance Financial 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 Genetec Technology and Alliance Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Genetec Technology Bhd and Alliance Financial Group, you can compare the effects of market volatilities on Genetec Technology and Alliance Financial 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 Genetec Technology with a short position of Alliance Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Genetec Technology and Alliance Financial.
Diversification Opportunities for Genetec Technology and Alliance Financial
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Genetec and Alliance is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Genetec Technology Bhd and Alliance Financial Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alliance Financial and Genetec Technology 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 Genetec Technology Bhd are associated (or correlated) with Alliance Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alliance Financial has no effect on the direction of Genetec Technology i.e., Genetec Technology and Alliance Financial go up and down completely randomly.
Pair Corralation between Genetec Technology and Alliance Financial
Assuming the 90 days trading horizon Genetec Technology Bhd is expected to generate 4.16 times more return on investment than Alliance Financial. However, Genetec Technology is 4.16 times more volatile than Alliance Financial Group. It trades about 0.08 of its potential returns per unit of risk. Alliance Financial Group is currently generating about 0.13 per unit of risk. If you would invest 101.00 in Genetec Technology Bhd on November 2, 2024 and sell it today you would earn a total of 38.00 from holding Genetec Technology Bhd or generate 37.62% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Genetec Technology Bhd vs. Alliance Financial Group
Performance |
| Timeline |
| Genetec Technology Bhd |
| Alliance Financial |
Genetec Technology and Alliance Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Genetec Technology and Alliance Financial
The main advantage of trading using opposite Genetec Technology and Alliance Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Genetec Technology position performs unexpectedly, Alliance Financial 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 Alliance Financial will offset losses from the drop in Alliance Financial's long position.| Genetec Technology vs. Supercomnet Technologies Bhd | Genetec Technology vs. Homeritz Bhd | Genetec Technology vs. Petronas Chemicals Group | Genetec Technology vs. Magni Tech Industries |
| Alliance Financial vs. Lotte Chemical Titan | Alliance Financial vs. Eonmetall Group Bhd | Alliance Financial vs. Press Metal Bhd | Alliance Financial vs. Kluang Rubber |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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