Correlation Between Greatech Technology and Dufu Tech
Can any of the company-specific risk be diversified away by investing in both Greatech Technology and Dufu Tech 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 Dufu Tech 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 Dufu Tech Corp, you can compare the effects of market volatilities on Greatech Technology and Dufu Tech 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 Dufu Tech. Check out your portfolio center. Please also check ongoing floating volatility patterns of Greatech Technology and Dufu Tech.
Diversification Opportunities for Greatech Technology and Dufu Tech
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Greatech and Dufu is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Greatech Technology Bhd and Dufu Tech Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dufu Tech Corp 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 Dufu Tech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dufu Tech Corp has no effect on the direction of Greatech Technology i.e., Greatech Technology and Dufu Tech go up and down completely randomly.
Pair Corralation between Greatech Technology and Dufu Tech
Assuming the 90 days trading horizon Greatech Technology Bhd is expected to generate 1.29 times more return on investment than Dufu Tech. However, Greatech Technology is 1.29 times more volatile than Dufu Tech Corp. It trades about -0.01 of its potential returns per unit of risk. Dufu Tech Corp is currently generating about -0.03 per unit of risk. If you would invest 215.00 in Greatech Technology Bhd on August 28, 2024 and sell it today you would lose (3.00) from holding Greatech Technology Bhd or give up 1.4% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Greatech Technology Bhd vs. Dufu Tech Corp
Performance |
| Timeline |
| Greatech Technology Bhd |
| Dufu Tech Corp |
Greatech Technology and Dufu Tech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Greatech Technology and Dufu Tech
The main advantage of trading using opposite Greatech Technology and Dufu Tech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Greatech Technology position performs unexpectedly, Dufu Tech 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 Dufu Tech will offset losses from the drop in Dufu Tech's long position.| Greatech Technology vs. K One Technology Bhd | Greatech Technology vs. Petronas Chemicals Group | Greatech Technology vs. Coraza Integrated Technology | Greatech Technology vs. ES Ceramics Technology |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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