Correlation Between GemVaxKAEL CoLtd and ABCO Electronics
Can any of the company-specific risk be diversified away by investing in both GemVaxKAEL CoLtd and ABCO Electronics 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 GemVaxKAEL CoLtd and ABCO Electronics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GemVaxKAEL CoLtd and ABCO Electronics Co, you can compare the effects of market volatilities on GemVaxKAEL CoLtd and ABCO Electronics 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 GemVaxKAEL CoLtd with a short position of ABCO Electronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of GemVaxKAEL CoLtd and ABCO Electronics.
Diversification Opportunities for GemVaxKAEL CoLtd and ABCO Electronics
0.4 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between GemVaxKAEL and ABCO is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding GemVaxKAEL CoLtd and ABCO Electronics Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ABCO Electronics and GemVaxKAEL CoLtd 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 GemVaxKAEL CoLtd are associated (or correlated) with ABCO Electronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ABCO Electronics has no effect on the direction of GemVaxKAEL CoLtd i.e., GemVaxKAEL CoLtd and ABCO Electronics go up and down completely randomly.
Pair Corralation between GemVaxKAEL CoLtd and ABCO Electronics
Assuming the 90 days trading horizon GemVaxKAEL CoLtd is expected to generate 1.81 times more return on investment than ABCO Electronics. However, GemVaxKAEL CoLtd is 1.81 times more volatile than ABCO Electronics Co. It trades about 0.11 of its potential returns per unit of risk. ABCO Electronics Co is currently generating about 0.06 per unit of risk. If you would invest 1,358,000 in GemVaxKAEL CoLtd on October 12, 2024 and sell it today you would earn a total of 316,000 from holding GemVaxKAEL CoLtd or generate 23.27% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
GemVaxKAEL CoLtd vs. ABCO Electronics Co
Performance |
| Timeline |
| GemVaxKAEL CoLtd |
| ABCO Electronics |
GemVaxKAEL CoLtd and ABCO Electronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GemVaxKAEL CoLtd and ABCO Electronics
The main advantage of trading using opposite GemVaxKAEL CoLtd and ABCO Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GemVaxKAEL CoLtd position performs unexpectedly, ABCO Electronics 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 ABCO Electronics will offset losses from the drop in ABCO Electronics' long position.| GemVaxKAEL CoLtd vs. Samlip General Foods | GemVaxKAEL CoLtd vs. Korean Drug Co | GemVaxKAEL CoLtd vs. Daechang Steel Co | GemVaxKAEL CoLtd vs. Hyundai Home Shopping |
| ABCO Electronics vs. KMH Hitech Co | ABCO Electronics vs. GemVaxKAEL CoLtd | ABCO Electronics vs. Bosung Power Technology | ABCO Electronics vs. Busan Industrial Co |
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.
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