Correlation Between GeneFerm Biotechnology and Sunfar Computer
Can any of the company-specific risk be diversified away by investing in both GeneFerm Biotechnology and Sunfar Computer 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 GeneFerm Biotechnology and Sunfar Computer into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GeneFerm Biotechnology Co and Sunfar Computer Co, you can compare the effects of market volatilities on GeneFerm Biotechnology and Sunfar Computer 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 GeneFerm Biotechnology with a short position of Sunfar Computer. Check out your portfolio center. Please also check ongoing floating volatility patterns of GeneFerm Biotechnology and Sunfar Computer.
Diversification Opportunities for GeneFerm Biotechnology and Sunfar Computer
0.51 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between GeneFerm and Sunfar is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding GeneFerm Biotechnology Co and Sunfar Computer Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sunfar Computer and GeneFerm Biotechnology 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 GeneFerm Biotechnology Co are associated (or correlated) with Sunfar Computer. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sunfar Computer has no effect on the direction of GeneFerm Biotechnology i.e., GeneFerm Biotechnology and Sunfar Computer go up and down completely randomly.
Pair Corralation between GeneFerm Biotechnology and Sunfar Computer
Assuming the 90 days trading horizon GeneFerm Biotechnology Co is expected to generate 4.32 times more return on investment than Sunfar Computer. However, GeneFerm Biotechnology is 4.32 times more volatile than Sunfar Computer Co. It trades about 0.09 of its potential returns per unit of risk. Sunfar Computer Co is currently generating about -0.06 per unit of risk. If you would invest 4,825 in GeneFerm Biotechnology Co on September 2, 2024 and sell it today you would earn a total of 170.00 from holding GeneFerm Biotechnology Co or generate 3.52% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
GeneFerm Biotechnology Co vs. Sunfar Computer Co
Performance |
| Timeline |
| GeneFerm Biotechnology |
| Sunfar Computer |
GeneFerm Biotechnology and Sunfar Computer Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GeneFerm Biotechnology and Sunfar Computer
The main advantage of trading using opposite GeneFerm Biotechnology and Sunfar Computer positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GeneFerm Biotechnology position performs unexpectedly, Sunfar Computer 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 Sunfar Computer will offset losses from the drop in Sunfar Computer's long position.| GeneFerm Biotechnology vs. United Radiant Technology | GeneFerm Biotechnology vs. Simplo Technology Co | GeneFerm Biotechnology vs. STL Technology Co | GeneFerm Biotechnology vs. Asmedia Technology |
| Sunfar Computer vs. Apex Biotechnology Corp | Sunfar Computer vs. GeneFerm Biotechnology Co | Sunfar Computer vs. Sunmax Biotechnology Co | Sunfar Computer vs. Emerging Display Technologies |
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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