Correlation Between Genovate Biotechnology and Connection Technology
Can any of the company-specific risk be diversified away by investing in both Genovate Biotechnology and Connection 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 Connection 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 Connection Technology Systems, you can compare the effects of market volatilities on Genovate Biotechnology and Connection 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 Connection Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Genovate Biotechnology and Connection Technology.
Diversification Opportunities for Genovate Biotechnology and Connection Technology
0.02 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Genovate and Connection is 0.02. Overlapping area represents the amount of risk that can be diversified away by holding Genovate Biotechnology Co and Connection Technology Systems in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Connection 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 Connection Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Connection Technology has no effect on the direction of Genovate Biotechnology i.e., Genovate Biotechnology and Connection Technology go up and down completely randomly.
Pair Corralation between Genovate Biotechnology and Connection Technology
Assuming the 90 days trading horizon Genovate Biotechnology Co is expected to under-perform the Connection Technology. But the stock apears to be less risky and, when comparing its historical volatility, Genovate Biotechnology Co is 3.02 times less risky than Connection Technology. The stock trades about -0.07 of its potential returns per unit of risk. The Connection Technology Systems is currently generating about -0.02 of returns per unit of risk over similar time horizon. If you would invest 2,600 in Connection Technology Systems on September 4, 2024 and sell it today you would lose (535.00) from holding Connection Technology Systems or give up 20.58% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Genovate Biotechnology Co vs. Connection Technology Systems
Performance |
| Timeline |
| Genovate Biotechnology |
| Connection Technology |
Genovate Biotechnology and Connection Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Genovate Biotechnology and Connection Technology
The main advantage of trading using opposite Genovate Biotechnology and Connection Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Genovate Biotechnology position performs unexpectedly, Connection 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 Connection Technology will offset losses from the drop in Connection 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 |
| Connection Technology vs. Genovate Biotechnology Co | Connection Technology vs. Sunmax Biotechnology Co | Connection Technology vs. Sports Gear Co | Connection Technology vs. Transcend Information |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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