Correlation Between Automobile and GemVaxKAEL CoLtd
Can any of the company-specific risk be diversified away by investing in both Automobile and GemVaxKAEL CoLtd 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 Automobile and GemVaxKAEL CoLtd into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Automobile Pc and GemVaxKAEL CoLtd, you can compare the effects of market volatilities on Automobile and GemVaxKAEL CoLtd 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 Automobile with a short position of GemVaxKAEL CoLtd. Check out your portfolio center. Please also check ongoing floating volatility patterns of Automobile and GemVaxKAEL CoLtd.
Diversification Opportunities for Automobile and GemVaxKAEL CoLtd
-0.28 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Automobile and GemVaxKAEL is -0.28. Overlapping area represents the amount of risk that can be diversified away by holding Automobile Pc and GemVaxKAEL CoLtd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GemVaxKAEL CoLtd and Automobile 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 Automobile Pc are associated (or correlated) with GemVaxKAEL CoLtd. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GemVaxKAEL CoLtd has no effect on the direction of Automobile i.e., Automobile and GemVaxKAEL CoLtd go up and down completely randomly.
Pair Corralation between Automobile and GemVaxKAEL CoLtd
Assuming the 90 days trading horizon Automobile Pc is expected to under-perform the GemVaxKAEL CoLtd. But the stock apears to be less risky and, when comparing its historical volatility, Automobile Pc is 1.05 times less risky than GemVaxKAEL CoLtd. The stock trades about -0.04 of its potential returns per unit of risk. The GemVaxKAEL CoLtd is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 1,619,000 in GemVaxKAEL CoLtd on October 30, 2024 and sell it today you would earn a total of 204,000 from holding GemVaxKAEL CoLtd or generate 12.6% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Automobile Pc vs. GemVaxKAEL CoLtd
Performance |
| Timeline |
| Automobile Pc |
| GemVaxKAEL CoLtd |
Automobile and GemVaxKAEL CoLtd Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Automobile and GemVaxKAEL CoLtd
The main advantage of trading using opposite Automobile and GemVaxKAEL CoLtd positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Automobile position performs unexpectedly, GemVaxKAEL CoLtd 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 GemVaxKAEL CoLtd will offset losses from the drop in GemVaxKAEL CoLtd's long position.| Automobile vs. Hana Materials | Automobile vs. Hyosung Advanced Materials | Automobile vs. INNOX Advanced Materials | Automobile vs. Chorokbaem Healthcare Co |
| GemVaxKAEL CoLtd vs. Tuksu Engineering ConstructionLtd | GemVaxKAEL CoLtd vs. Sam Yang Foods | GemVaxKAEL CoLtd vs. Samsung Publishing Co | GemVaxKAEL CoLtd vs. Shinsegae Engineering Construction |
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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
Other Complementary Tools
| Bonds Directory Find actively traded corporate debentures issued by US companies | |
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. | |
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm | |
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities | |
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities |