Correlation Between Gemtek Technology and ALi Corp
Can any of the company-specific risk be diversified away by investing in both Gemtek Technology and ALi Corp 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 Gemtek Technology and ALi Corp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Gemtek Technology Co and ALi Corp, you can compare the effects of market volatilities on Gemtek Technology and ALi Corp 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 Gemtek Technology with a short position of ALi Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gemtek Technology and ALi Corp.
Diversification Opportunities for Gemtek Technology and ALi Corp
-0.71 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Gemtek and ALi is -0.71. Overlapping area represents the amount of risk that can be diversified away by holding Gemtek Technology Co and ALi Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ALi Corp and Gemtek Technology 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 Gemtek Technology Co are associated (or correlated) with ALi Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ALi Corp has no effect on the direction of Gemtek Technology i.e., Gemtek Technology and ALi Corp go up and down completely randomly.
Pair Corralation between Gemtek Technology and ALi Corp
Assuming the 90 days trading horizon Gemtek Technology is expected to generate 2.26 times less return on investment than ALi Corp. But when comparing it to its historical volatility, Gemtek Technology Co is 2.1 times less risky than ALi Corp. It trades about 0.03 of its potential returns per unit of risk. ALi Corp is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 2,105 in ALi Corp on September 12, 2024 and sell it today you would earn a total of 1,040 from holding ALi Corp or generate 49.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Gemtek Technology Co vs. ALi Corp
Performance |
| Timeline |
| Gemtek Technology |
| ALi Corp |
Gemtek Technology and ALi Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gemtek Technology and ALi Corp
The main advantage of trading using opposite Gemtek Technology and ALi Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gemtek Technology position performs unexpectedly, ALi Corp 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 ALi Corp will offset losses from the drop in ALi Corp's long position.| Gemtek Technology vs. AU Optronics | Gemtek Technology vs. Innolux Corp | Gemtek Technology vs. Ruentex Development Co | Gemtek Technology vs. WiseChip Semiconductor |
| ALi Corp vs. Sunplus Technology Co | ALi Corp vs. Silicon Integrated Systems | ALi Corp vs. Zinwell | ALi Corp vs. Altek 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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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