Correlation Between Greatech Technology and Supercomnet Technologies
Can any of the company-specific risk be diversified away by investing in both Greatech Technology and Supercomnet Technologies 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 Greatech Technology and Supercomnet Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Greatech Technology Bhd and Supercomnet Technologies Bhd, you can compare the effects of market volatilities on Greatech Technology and Supercomnet Technologies 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 Greatech Technology with a short position of Supercomnet Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Greatech Technology and Supercomnet Technologies.
Diversification Opportunities for Greatech Technology and Supercomnet Technologies
-0.34 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Greatech and Supercomnet is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding Greatech Technology Bhd and Supercomnet Technologies Bhd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Supercomnet Technologies and Greatech 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 Greatech Technology Bhd are associated (or correlated) with Supercomnet Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Supercomnet Technologies has no effect on the direction of Greatech Technology i.e., Greatech Technology and Supercomnet Technologies go up and down completely randomly.
Pair Corralation between Greatech Technology and Supercomnet Technologies
Assuming the 90 days trading horizon Greatech Technology Bhd is expected to generate 2.32 times more return on investment than Supercomnet Technologies. However, Greatech Technology is 2.32 times more volatile than Supercomnet Technologies Bhd. It trades about -0.03 of its potential returns per unit of risk. Supercomnet Technologies Bhd is currently generating about -0.29 per unit of risk. If you would invest 211.00 in Greatech Technology Bhd on August 24, 2024 and sell it today you would lose (5.00) from holding Greatech Technology Bhd or give up 2.37% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Greatech Technology Bhd vs. Supercomnet Technologies Bhd
Performance |
| Timeline |
| Greatech Technology Bhd |
| Supercomnet Technologies |
Greatech Technology and Supercomnet Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Greatech Technology and Supercomnet Technologies
The main advantage of trading using opposite Greatech Technology and Supercomnet Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Greatech Technology position performs unexpectedly, Supercomnet Technologies 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 Supercomnet Technologies will offset losses from the drop in Supercomnet Technologies' long position.| Greatech Technology vs. Petronas Chemicals Group | Greatech Technology vs. Oriental Food Industries | Greatech Technology vs. Media Prima Bhd | Greatech Technology vs. BP Plastics Holding |
| Supercomnet Technologies vs. Greatech Technology Bhd | Supercomnet Technologies vs. Uwc Bhd | Supercomnet Technologies vs. Genetec Technology Bhd | Supercomnet Technologies vs. PIE Industrial Bhd |
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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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