Correlation Between GemVaxKAEL CoLtd and MITECH CoLtd
Can any of the company-specific risk be diversified away by investing in both GemVaxKAEL CoLtd and MITECH CoLtd 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 MITECH CoLtd into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GemVaxKAEL CoLtd and MITECH CoLtd, you can compare the effects of market volatilities on GemVaxKAEL CoLtd and MITECH CoLtd 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 MITECH CoLtd. Check out your portfolio center. Please also check ongoing floating volatility patterns of GemVaxKAEL CoLtd and MITECH CoLtd.
Diversification Opportunities for GemVaxKAEL CoLtd and MITECH CoLtd
0.18 | Correlation Coefficient |
Average diversification
The 3 months correlation between GemVaxKAEL and MITECH is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding GemVaxKAEL CoLtd and MITECH CoLtd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MITECH CoLtd 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 MITECH CoLtd. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MITECH CoLtd has no effect on the direction of GemVaxKAEL CoLtd i.e., GemVaxKAEL CoLtd and MITECH CoLtd go up and down completely randomly.
Pair Corralation between GemVaxKAEL CoLtd and MITECH CoLtd
Assuming the 90 days trading horizon GemVaxKAEL CoLtd is expected to generate 1.85 times more return on investment than MITECH CoLtd. However, GemVaxKAEL CoLtd is 1.85 times more volatile than MITECH CoLtd. It trades about 0.05 of its potential returns per unit of risk. MITECH CoLtd is currently generating about 0.02 per unit of risk. If you would invest 1,168,000 in GemVaxKAEL CoLtd on September 24, 2024 and sell it today you would earn a total of 217,000 from holding GemVaxKAEL CoLtd or generate 18.58% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
GemVaxKAEL CoLtd vs. MITECH CoLtd
Performance |
| Timeline |
| GemVaxKAEL CoLtd |
| MITECH CoLtd |
GemVaxKAEL CoLtd and MITECH CoLtd Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GemVaxKAEL CoLtd and MITECH CoLtd
The main advantage of trading using opposite GemVaxKAEL CoLtd and MITECH CoLtd positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GemVaxKAEL CoLtd position performs unexpectedly, MITECH CoLtd 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 MITECH CoLtd will offset losses from the drop in MITECH CoLtd's long position.| GemVaxKAEL CoLtd vs. Dongsin Engineering Construction | GemVaxKAEL CoLtd vs. Doosan Fuel Cell | GemVaxKAEL CoLtd vs. Daishin Balance 1 | GemVaxKAEL CoLtd vs. Total Soft Bank |
| MITECH CoLtd vs. Samsung Electronics Co | MITECH CoLtd vs. Samsung Electronics Co | MITECH CoLtd vs. LG Energy Solution | MITECH CoLtd vs. SK Hynix |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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