Correlation Between Elite Material and Getac Technology
Can any of the company-specific risk be diversified away by investing in both Elite Material and Getac 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 Elite Material and Getac Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Elite Material Co and Getac Technology Corp, you can compare the effects of market volatilities on Elite Material and Getac 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 Elite Material with a short position of Getac Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Elite Material and Getac Technology.
Diversification Opportunities for Elite Material and Getac Technology
-0.44 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Elite and Getac is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding Elite Material Co and Getac Technology Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Getac Technology Corp and Elite Material 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 Elite Material Co are associated (or correlated) with Getac Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Getac Technology Corp has no effect on the direction of Elite Material i.e., Elite Material and Getac Technology go up and down completely randomly.
Pair Corralation between Elite Material and Getac Technology
Assuming the 90 days trading horizon Elite Material Co is expected to generate 1.21 times more return on investment than Getac Technology. However, Elite Material is 1.21 times more volatile than Getac Technology Corp. It trades about 0.0 of its potential returns per unit of risk. Getac Technology Corp is currently generating about -0.03 per unit of risk. If you would invest 49,850 in Elite Material Co on September 1, 2024 and sell it today you would lose (3,000) from holding Elite Material Co or give up 6.02% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Elite Material Co vs. Getac Technology Corp
Performance |
| Timeline |
| Elite Material |
| Getac Technology Corp |
Elite Material and Getac Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Elite Material and Getac Technology
The main advantage of trading using opposite Elite Material and Getac Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Elite Material position performs unexpectedly, Getac 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 Getac Technology will offset losses from the drop in Getac Technology's long position.The idea behind Elite Material Co and Getac Technology Corp 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.| Getac Technology vs. Chicony Electronics Co | Getac Technology vs. Inventec Corp | Getac Technology vs. Synnex Technology International | Getac Technology vs. Micro Star International 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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