Correlation Between GeneReach Biotechnology and Kworld Computer
Can any of the company-specific risk be diversified away by investing in both GeneReach Biotechnology and Kworld Computer 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 GeneReach Biotechnology and Kworld Computer into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GeneReach Biotechnology and Kworld Computer Co, you can compare the effects of market volatilities on GeneReach Biotechnology and Kworld Computer 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 GeneReach Biotechnology with a short position of Kworld Computer. Check out your portfolio center. Please also check ongoing floating volatility patterns of GeneReach Biotechnology and Kworld Computer.
Diversification Opportunities for GeneReach Biotechnology and Kworld Computer
0.52 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between GeneReach and Kworld is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding GeneReach Biotechnology and Kworld Computer Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kworld Computer and GeneReach 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 GeneReach Biotechnology are associated (or correlated) with Kworld Computer. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kworld Computer has no effect on the direction of GeneReach Biotechnology i.e., GeneReach Biotechnology and Kworld Computer go up and down completely randomly.
Pair Corralation between GeneReach Biotechnology and Kworld Computer
Assuming the 90 days trading horizon GeneReach Biotechnology is expected to under-perform the Kworld Computer. But the stock apears to be less risky and, when comparing its historical volatility, GeneReach Biotechnology is 1.85 times less risky than Kworld Computer. The stock trades about -0.04 of its potential returns per unit of risk. The Kworld Computer Co is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 1,390 in Kworld Computer Co on October 16, 2024 and sell it today you would earn a total of 1,705 from holding Kworld Computer Co or generate 122.66% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
GeneReach Biotechnology vs. Kworld Computer Co
Performance |
| Timeline |
| GeneReach Biotechnology |
| Kworld Computer |
GeneReach Biotechnology and Kworld Computer Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GeneReach Biotechnology and Kworld Computer
The main advantage of trading using opposite GeneReach Biotechnology and Kworld Computer positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GeneReach Biotechnology position performs unexpectedly, Kworld Computer 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 Kworld Computer will offset losses from the drop in Kworld Computer's long position.| GeneReach Biotechnology vs. DingZing Advanced Materials | GeneReach Biotechnology vs. ThinTech Materials Technology | GeneReach Biotechnology vs. Tung Ho Steel | GeneReach Biotechnology vs. Sheng Yu Steel |
| Kworld Computer vs. GeneReach Biotechnology | Kworld Computer vs. Aker Technology Co | Kworld Computer vs. Golden Biotechnology | Kworld Computer vs. Central Reinsurance Corp |
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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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