Correlation Between Greatek Electronics and Vate Technology
Can any of the company-specific risk be diversified away by investing in both Greatek Electronics and Vate 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 Greatek Electronics and Vate Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Greatek Electronics and Vate Technology Co, you can compare the effects of market volatilities on Greatek Electronics and Vate 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 Greatek Electronics with a short position of Vate Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Greatek Electronics and Vate Technology.
Diversification Opportunities for Greatek Electronics and Vate Technology
-0.16 | Correlation Coefficient |
Good diversification
The 3 months correlation between Greatek and Vate is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding Greatek Electronics and Vate Technology Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vate Technology and Greatek Electronics 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 Greatek Electronics are associated (or correlated) with Vate Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vate Technology has no effect on the direction of Greatek Electronics i.e., Greatek Electronics and Vate Technology go up and down completely randomly.
Pair Corralation between Greatek Electronics and Vate Technology
Assuming the 90 days trading horizon Greatek Electronics is expected to generate 0.35 times more return on investment than Vate Technology. However, Greatek Electronics is 2.85 times less risky than Vate Technology. It trades about 0.35 of its potential returns per unit of risk. Vate Technology Co is currently generating about -0.11 per unit of risk. If you would invest 5,640 in Greatek Electronics on October 24, 2024 and sell it today you would earn a total of 500.00 from holding Greatek Electronics or generate 8.87% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Greatek Electronics vs. Vate Technology Co
Performance |
| Timeline |
| Greatek Electronics |
| Vate Technology |
Greatek Electronics and Vate Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Greatek Electronics and Vate Technology
The main advantage of trading using opposite Greatek Electronics and Vate Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Greatek Electronics position performs unexpectedly, Vate 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 Vate Technology will offset losses from the drop in Vate Technology's long position.| Greatek Electronics vs. King Yuan Electronics | Greatek Electronics vs. Powertech Technology | Greatek Electronics vs. Realtek Semiconductor Corp | Greatek Electronics vs. Elan Microelectronics Corp |
| Vate Technology vs. Jentech Precision Industrial | Vate Technology vs. Wha Yu Industrial | Vate Technology vs. Aerospace Industrial Development | Vate Technology vs. Camellia Metal 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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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