Correlation Between Pan International and Gemtek Technology
Can any of the company-specific risk be diversified away by investing in both Pan International and Gemtek Technology 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 Pan International and Gemtek Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Pan International Industrial Corp and Gemtek Technology Co, you can compare the effects of market volatilities on Pan International and Gemtek Technology 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 Pan International with a short position of Gemtek Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pan International and Gemtek Technology.
Diversification Opportunities for Pan International and Gemtek Technology
-0.3 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Pan and Gemtek is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding Pan International Industrial C and Gemtek Technology Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gemtek Technology and Pan International 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 Pan International Industrial Corp are associated (or correlated) with Gemtek Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gemtek Technology has no effect on the direction of Pan International i.e., Pan International and Gemtek Technology go up and down completely randomly.
Pair Corralation between Pan International and Gemtek Technology
Assuming the 90 days trading horizon Pan International Industrial Corp is expected to generate 1.35 times more return on investment than Gemtek Technology. However, Pan International is 1.35 times more volatile than Gemtek Technology Co. It trades about 0.22 of its potential returns per unit of risk. Gemtek Technology Co is currently generating about -0.01 per unit of risk. If you would invest 3,940 in Pan International Industrial Corp on November 28, 2024 and sell it today you would earn a total of 185.00 from holding Pan International Industrial Corp or generate 4.7% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Pan International Industrial C vs. Gemtek Technology Co
Performance |
| Timeline |
| Pan International |
| Gemtek Technology |
Pan International and Gemtek Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pan International and Gemtek Technology
The main advantage of trading using opposite Pan International and Gemtek Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pan International position performs unexpectedly, Gemtek Technology 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 Gemtek Technology will offset losses from the drop in Gemtek Technology's long position.| Pan International vs. Nankang Rubber Tire | Pan International vs. Hwa Fong Rubber | Pan International vs. FineMat Applied Materials | Pan International vs. Asia Metal Industries |
| Gemtek Technology vs. D Link Corp | Gemtek Technology vs. Sunplus Technology Co | Gemtek Technology vs. Silitech Technology Corp | Gemtek Technology vs. Zinwell |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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