Correlation Between Greatech Technology and Sanichi Technology
Can any of the company-specific risk be diversified away by investing in both Greatech Technology and Sanichi Technology 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 Sanichi Technology 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 Sanichi Technology Bhd, you can compare the effects of market volatilities on Greatech Technology and Sanichi Technology 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 Sanichi Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Greatech Technology and Sanichi Technology.
Diversification Opportunities for Greatech Technology and Sanichi Technology
-0.3 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Greatech and Sanichi is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding Greatech Technology Bhd and Sanichi Technology Bhd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sanichi Technology Bhd 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 Sanichi Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sanichi Technology Bhd has no effect on the direction of Greatech Technology i.e., Greatech Technology and Sanichi Technology go up and down completely randomly.
Pair Corralation between Greatech Technology and Sanichi Technology
Assuming the 90 days trading horizon Greatech Technology Bhd is expected to generate 0.11 times more return on investment than Sanichi Technology. However, Greatech Technology Bhd is 9.08 times less risky than Sanichi Technology. It trades about 0.36 of its potential returns per unit of risk. Sanichi Technology Bhd is currently generating about -0.04 per unit of risk. If you would invest 203.00 in Greatech Technology Bhd on September 28, 2024 and sell it today you would earn a total of 26.00 from holding Greatech Technology Bhd or generate 12.81% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Greatech Technology Bhd vs. Sanichi Technology Bhd
Performance |
| Timeline |
| Greatech Technology Bhd |
| Sanichi Technology Bhd |
Greatech Technology and Sanichi Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Greatech Technology and Sanichi Technology
The main advantage of trading using opposite Greatech Technology and Sanichi Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Greatech Technology position performs unexpectedly, Sanichi Technology 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 Sanichi Technology will offset losses from the drop in Sanichi Technology's long position.| Greatech Technology vs. Uwc Bhd | Greatech Technology vs. Genetec Technology Bhd | Greatech Technology vs. Dufu Tech Corp | Greatech Technology vs. Supercomnet Technologies Bhd |
| Sanichi Technology vs. Greatech Technology Bhd | Sanichi Technology vs. Uwc Bhd | Sanichi Technology vs. Genetec Technology Bhd | Sanichi Technology vs. Dufu Tech Corp |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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