Correlation Between People Technology and Global Standard
Can any of the company-specific risk be diversified away by investing in both People Technology and Global Standard 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 People Technology and Global Standard into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between People Technology and Global Standard Technology, you can compare the effects of market volatilities on People Technology and Global Standard 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 People Technology with a short position of Global Standard. Check out your portfolio center. Please also check ongoing floating volatility patterns of People Technology and Global Standard.
Diversification Opportunities for People Technology and Global Standard
0.79 | Correlation Coefficient |
Poor diversification
The 3 months correlation between People and Global is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding People Technology and Global Standard Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global Standard Tech and People 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 People Technology are associated (or correlated) with Global Standard. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Global Standard Tech has no effect on the direction of People Technology i.e., People Technology and Global Standard go up and down completely randomly.
Pair Corralation between People Technology and Global Standard
Assuming the 90 days trading horizon People Technology is expected to under-perform the Global Standard. In addition to that, People Technology is 1.12 times more volatile than Global Standard Technology. It trades about -0.13 of its total potential returns per unit of risk. Global Standard Technology is currently generating about 0.06 per unit of volatility. If you would invest 1,526,000 in Global Standard Technology on August 28, 2024 and sell it today you would earn a total of 46,000 from holding Global Standard Technology or generate 3.01% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
People Technology vs. Global Standard Technology
Performance |
| Timeline |
| People Technology |
| Global Standard Tech |
People Technology and Global Standard Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with People Technology and Global Standard
The main advantage of trading using opposite People Technology and Global Standard positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if People Technology position performs unexpectedly, Global Standard 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 Global Standard will offset losses from the drop in Global Standard's long position.| People Technology vs. Samsung Electronics Co | People Technology vs. Samsung Electronics Co | People Technology vs. Hyundai Motor Co | People Technology vs. Hyundai Motor |
| Global Standard vs. Korea Real Estate | Global Standard vs. Korea Ratings Co | Global Standard vs. IQuest Co | Global Standard vs. Wonbang Tech 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 Stocks Directory module to find actively traded stocks across global markets.
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