Correlation Between Genovate Biotechnology and Asia Tech
Can any of the company-specific risk be diversified away by investing in both Genovate Biotechnology and Asia Tech 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 Asia Tech 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 Asia Tech Image, you can compare the effects of market volatilities on Genovate Biotechnology and Asia Tech 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 Asia Tech. Check out your portfolio center. Please also check ongoing floating volatility patterns of Genovate Biotechnology and Asia Tech.
Diversification Opportunities for Genovate Biotechnology and Asia Tech
-0.27 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Genovate and Asia is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding Genovate Biotechnology Co and Asia Tech Image in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Asia Tech Image 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 Asia Tech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Asia Tech Image has no effect on the direction of Genovate Biotechnology i.e., Genovate Biotechnology and Asia Tech go up and down completely randomly.
Pair Corralation between Genovate Biotechnology and Asia Tech
Assuming the 90 days trading horizon Genovate Biotechnology Co is expected to generate 0.76 times more return on investment than Asia Tech. However, Genovate Biotechnology Co is 1.32 times less risky than Asia Tech. It trades about 0.27 of its potential returns per unit of risk. Asia Tech Image is currently generating about -0.24 per unit of risk. If you would invest 2,070 in Genovate Biotechnology Co on November 3, 2024 and sell it today you would earn a total of 320.00 from holding Genovate Biotechnology Co or generate 15.46% 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. Asia Tech Image
Performance |
| Timeline |
| Genovate Biotechnology |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Modest
| Asia Tech Image |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Modest
Genovate Biotechnology and Asia Tech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Genovate Biotechnology and Asia Tech
The main advantage of trading using opposite Genovate Biotechnology and Asia Tech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Genovate Biotechnology position performs unexpectedly, Asia Tech 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 Asia Tech will offset losses from the drop in Asia Tech's long position.The idea behind Genovate Biotechnology Co and Asia Tech Image 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.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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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