Correlation Between GemVaxKAEL CoLtd and KMH Hitech
Can any of the company-specific risk be diversified away by investing in both GemVaxKAEL CoLtd and KMH Hitech 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 KMH Hitech into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GemVaxKAEL CoLtd and KMH Hitech Co, you can compare the effects of market volatilities on GemVaxKAEL CoLtd and KMH Hitech 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 KMH Hitech. Check out your portfolio center. Please also check ongoing floating volatility patterns of GemVaxKAEL CoLtd and KMH Hitech.
Diversification Opportunities for GemVaxKAEL CoLtd and KMH Hitech
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between GemVaxKAEL and KMH is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding GemVaxKAEL CoLtd and KMH Hitech Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KMH Hitech 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 KMH Hitech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KMH Hitech has no effect on the direction of GemVaxKAEL CoLtd i.e., GemVaxKAEL CoLtd and KMH Hitech go up and down completely randomly.
Pair Corralation between GemVaxKAEL CoLtd and KMH Hitech
Assuming the 90 days trading horizon GemVaxKAEL CoLtd is expected to generate 1.68 times more return on investment than KMH Hitech. However, GemVaxKAEL CoLtd is 1.68 times more volatile than KMH Hitech Co. It trades about 0.06 of its potential returns per unit of risk. KMH Hitech Co is currently generating about -0.02 per unit of risk. If you would invest 1,526,000 in GemVaxKAEL CoLtd on November 27, 2024 and sell it today you would earn a total of 1,949,000 from holding GemVaxKAEL CoLtd or generate 127.72% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
GemVaxKAEL CoLtd vs. KMH Hitech Co
Performance |
| Timeline |
| GemVaxKAEL CoLtd |
| KMH Hitech |
GemVaxKAEL CoLtd and KMH Hitech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GemVaxKAEL CoLtd and KMH Hitech
The main advantage of trading using opposite GemVaxKAEL CoLtd and KMH Hitech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GemVaxKAEL CoLtd position performs unexpectedly, KMH Hitech 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 KMH Hitech will offset losses from the drop in KMH Hitech's long position.| GemVaxKAEL CoLtd vs. Hwangkum Steel Technology | GemVaxKAEL CoLtd vs. Echomarketing CoLtd | GemVaxKAEL CoLtd vs. Leaders Technology Investment | GemVaxKAEL CoLtd vs. SV Investment |
| KMH Hitech vs. Narae Nanotech Corp | KMH Hitech vs. Digital Multimedia Technology | KMH Hitech vs. MediaZen | KMH Hitech vs. ChipsMedia |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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