Correlation Between MITECH CoLtd and Genic

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Can any of the company-specific risk be diversified away by investing in both MITECH CoLtd and Genic 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 MITECH CoLtd and Genic into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MITECH CoLtd and Genic Co, you can compare the effects of market volatilities on MITECH CoLtd and Genic 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 MITECH CoLtd with a short position of Genic. Check out your portfolio center. Please also check ongoing floating volatility patterns of MITECH CoLtd and Genic.

Diversification Opportunities for MITECH CoLtd and Genic

0.78
  Correlation Coefficient

Poor diversification

The 3 months correlation between MITECH and Genic is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding MITECH CoLtd and Genic Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Genic and MITECH 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 MITECH CoLtd are associated (or correlated) with Genic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Genic has no effect on the direction of MITECH CoLtd i.e., MITECH CoLtd and Genic go up and down completely randomly.

Pair Corralation between MITECH CoLtd and Genic

Assuming the 90 days trading horizon MITECH CoLtd is expected to under-perform the Genic. But the stock apears to be less risky and, when comparing its historical volatility, MITECH CoLtd is 1.54 times less risky than Genic. The stock trades about -0.03 of its potential returns per unit of risk. The Genic Co is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest  495,000  in Genic Co on September 25, 2024 and sell it today you would earn a total of  1,805,000  from holding Genic Co or generate 364.65% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthSignificant
Accuracy99.75%
ValuesDaily Returns

MITECH CoLtd  vs.  Genic Co

 Performance 
       Timeline  
MITECH CoLtd 

Risk-Adjusted Performance

5 of 100

 
Weak
 
Strong
Modest
Compared to the overall equity markets, risk-adjusted returns on investments in MITECH CoLtd are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, MITECH CoLtd may actually be approaching a critical reversion point that can send shares even higher in January 2025.
Genic 

Risk-Adjusted Performance

9 of 100

 
Weak
 
Strong
OK
Compared to the overall equity markets, risk-adjusted returns on investments in Genic Co are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Genic sustained solid returns over the last few months and may actually be approaching a breakup point.

MITECH CoLtd and Genic Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with MITECH CoLtd and Genic

The main advantage of trading using opposite MITECH CoLtd and Genic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MITECH CoLtd position performs unexpectedly, Genic 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 Genic will offset losses from the drop in Genic's long position.
The idea behind MITECH CoLtd and Genic Co pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.

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