Correlation Between Genovate Biotechnology and Great China
Can any of the company-specific risk be diversified away by investing in both Genovate Biotechnology and Great China 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 Great China 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 Great China Metal, you can compare the effects of market volatilities on Genovate Biotechnology and Great China 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 Great China. Check out your portfolio center. Please also check ongoing floating volatility patterns of Genovate Biotechnology and Great China.
Diversification Opportunities for Genovate Biotechnology and Great China
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Genovate and Great is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Genovate Biotechnology Co and Great China Metal in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Great China Metal 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 Great China. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Great China Metal has no effect on the direction of Genovate Biotechnology i.e., Genovate Biotechnology and Great China go up and down completely randomly.
Pair Corralation between Genovate Biotechnology and Great China
Assuming the 90 days trading horizon Genovate Biotechnology Co is expected to generate 1.27 times more return on investment than Great China. However, Genovate Biotechnology is 1.27 times more volatile than Great China Metal. It trades about 0.27 of its potential returns per unit of risk. Great China Metal is currently generating about 0.29 per unit of risk. If you would invest 2,320 in Genovate Biotechnology Co on November 28, 2024 and sell it today you would earn a total of 90.00 from holding Genovate Biotechnology Co or generate 3.88% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Genovate Biotechnology Co vs. Great China Metal
Performance |
| Timeline |
| Genovate Biotechnology |
| Great China Metal |
Genovate Biotechnology and Great China Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Genovate Biotechnology and Great China
The main advantage of trading using opposite Genovate Biotechnology and Great China positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Genovate Biotechnology position performs unexpectedly, Great China 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 Great China will offset losses from the drop in Great China's long position.| Genovate Biotechnology vs. Johnson Health Tech | Genovate Biotechnology vs. Hunya Foods Co | Genovate Biotechnology vs. Sporton International | Genovate Biotechnology vs. Mechema Chemicals Int |
| Great China vs. Taiwan Hon Chuan | Great China vs. Taiwan Secom Co | Great China vs. Taiwan Fu Hsing | Great China vs. Taiwan Shin Kong |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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