Correlation Between SIMMTECH and GemVaxKAEL CoLtd
Can any of the company-specific risk be diversified away by investing in both SIMMTECH and GemVaxKAEL 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 SIMMTECH and GemVaxKAEL CoLtd into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SIMMTECH Co and GemVaxKAEL CoLtd, you can compare the effects of market volatilities on SIMMTECH and GemVaxKAEL 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 SIMMTECH with a short position of GemVaxKAEL CoLtd. Check out your portfolio center. Please also check ongoing floating volatility patterns of SIMMTECH and GemVaxKAEL CoLtd.
Diversification Opportunities for SIMMTECH and GemVaxKAEL CoLtd
-0.11 | Correlation Coefficient |
Good diversification
The 3 months correlation between SIMMTECH and GemVaxKAEL is -0.11. Overlapping area represents the amount of risk that can be diversified away by holding SIMMTECH Co and GemVaxKAEL CoLtd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GemVaxKAEL CoLtd and SIMMTECH 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 SIMMTECH Co are associated (or correlated) with GemVaxKAEL CoLtd. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GemVaxKAEL CoLtd has no effect on the direction of SIMMTECH i.e., SIMMTECH and GemVaxKAEL CoLtd go up and down completely randomly.
Pair Corralation between SIMMTECH and GemVaxKAEL CoLtd
Assuming the 90 days trading horizon SIMMTECH Co is expected to under-perform the GemVaxKAEL CoLtd. But the stock apears to be less risky and, when comparing its historical volatility, SIMMTECH Co is 2.62 times less risky than GemVaxKAEL CoLtd. The stock trades about -0.41 of its potential returns per unit of risk. The GemVaxKAEL CoLtd is currently generating about -0.07 of returns per unit of risk over similar time horizon. If you would invest 1,976,000 in GemVaxKAEL CoLtd on August 29, 2024 and sell it today you would lose (529,000) from holding GemVaxKAEL CoLtd or give up 26.77% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 97.5% |
| Values | Daily Returns |
SIMMTECH Co vs. GemVaxKAEL CoLtd
Performance |
| Timeline |
| SIMMTECH |
| GemVaxKAEL CoLtd |
SIMMTECH and GemVaxKAEL CoLtd Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SIMMTECH and GemVaxKAEL CoLtd
The main advantage of trading using opposite SIMMTECH and GemVaxKAEL CoLtd positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SIMMTECH position performs unexpectedly, GemVaxKAEL 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 GemVaxKAEL CoLtd will offset losses from the drop in GemVaxKAEL CoLtd's long position.| SIMMTECH vs. Cuckoo Homesys Co | SIMMTECH vs. Hansol Homedeco Co | SIMMTECH vs. Intellian Technologies | SIMMTECH vs. CU Tech Corp |
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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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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