Correlation Between Genovate Biotechnology and Arbor Technology
Can any of the company-specific risk be diversified away by investing in both Genovate Biotechnology and Arbor 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 Genovate Biotechnology and Arbor Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Genovate Biotechnology Co and Arbor Technology, you can compare the effects of market volatilities on Genovate Biotechnology and Arbor 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 Genovate Biotechnology with a short position of Arbor Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Genovate Biotechnology and Arbor Technology.
Diversification Opportunities for Genovate Biotechnology and Arbor Technology
-0.15 | Correlation Coefficient |
Good diversification
The 3 months correlation between Genovate and Arbor is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding Genovate Biotechnology Co and Arbor Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Arbor Technology and Genovate 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 Genovate Biotechnology Co are associated (or correlated) with Arbor Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Arbor Technology has no effect on the direction of Genovate Biotechnology i.e., Genovate Biotechnology and Arbor Technology go up and down completely randomly.
Pair Corralation between Genovate Biotechnology and Arbor Technology
Assuming the 90 days trading horizon Genovate Biotechnology is expected to generate 2.86 times less return on investment than Arbor Technology. In addition to that, Genovate Biotechnology is 2.15 times more volatile than Arbor Technology. It trades about 0.01 of its total potential returns per unit of risk. Arbor Technology is currently generating about 0.05 per unit of volatility. If you would invest 2,770 in Arbor Technology on September 3, 2024 and sell it today you would earn a total of 1,820 from holding Arbor Technology or generate 65.7% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Genovate Biotechnology Co vs. Arbor Technology
Performance |
| Timeline |
| Genovate Biotechnology |
| Arbor Technology |
Genovate Biotechnology and Arbor Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Genovate Biotechnology and Arbor Technology
The main advantage of trading using opposite Genovate Biotechnology and Arbor Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Genovate Biotechnology position performs unexpectedly, Arbor 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 Arbor Technology will offset losses from the drop in Arbor Technology's long position.| Genovate Biotechnology vs. Symtek Automation Asia | Genovate Biotechnology vs. WiseChip Semiconductor | Genovate Biotechnology vs. Novatek Microelectronics Corp | Genovate Biotechnology vs. Leader Electronics |
| Arbor Technology vs. Advantech Co | Arbor Technology vs. Asustek Computer | Arbor Technology vs. Compal Electronics | Arbor Technology vs. WiseChip Semiconductor |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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