Correlation Between GemVaxKAEL CoLtd and Ecoplastic
Can any of the company-specific risk be diversified away by investing in both GemVaxKAEL CoLtd and Ecoplastic 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 Ecoplastic into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GemVaxKAEL CoLtd and Ecoplastic, you can compare the effects of market volatilities on GemVaxKAEL CoLtd and Ecoplastic 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 Ecoplastic. Check out your portfolio center. Please also check ongoing floating volatility patterns of GemVaxKAEL CoLtd and Ecoplastic.
Diversification Opportunities for GemVaxKAEL CoLtd and Ecoplastic
-0.08 | Correlation Coefficient |
Good diversification
The 3 months correlation between GemVaxKAEL and Ecoplastic is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding GemVaxKAEL CoLtd and Ecoplastic in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ecoplastic 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 Ecoplastic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ecoplastic has no effect on the direction of GemVaxKAEL CoLtd i.e., GemVaxKAEL CoLtd and Ecoplastic go up and down completely randomly.
Pair Corralation between GemVaxKAEL CoLtd and Ecoplastic
Assuming the 90 days trading horizon GemVaxKAEL CoLtd is expected to generate 3.05 times more return on investment than Ecoplastic. However, GemVaxKAEL CoLtd is 3.05 times more volatile than Ecoplastic. It trades about 0.04 of its potential returns per unit of risk. Ecoplastic is currently generating about -0.23 per unit of risk. If you would invest 1,420,000 in GemVaxKAEL CoLtd on August 29, 2024 and sell it today you would earn a total of 27,000 from holding GemVaxKAEL CoLtd or generate 1.9% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
GemVaxKAEL CoLtd vs. Ecoplastic
Performance |
| Timeline |
| GemVaxKAEL CoLtd |
| Ecoplastic |
GemVaxKAEL CoLtd and Ecoplastic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GemVaxKAEL CoLtd and Ecoplastic
The main advantage of trading using opposite GemVaxKAEL CoLtd and Ecoplastic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GemVaxKAEL CoLtd position performs unexpectedly, Ecoplastic 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 Ecoplastic will offset losses from the drop in Ecoplastic's long position.| GemVaxKAEL CoLtd vs. Daejung Chemicals Metals | GemVaxKAEL CoLtd vs. Stic Investments | GemVaxKAEL CoLtd vs. Miwon Chemicals Co | GemVaxKAEL CoLtd vs. SK Chemicals Co |
| Ecoplastic vs. KMH Hitech Co | Ecoplastic vs. GemVaxKAEL CoLtd | Ecoplastic vs. Busan Industrial Co | Ecoplastic vs. Busan Ind |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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