Correlation Between Gemtek Technology and Auden Techno
Can any of the company-specific risk be diversified away by investing in both Gemtek Technology and Auden Techno 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 Auden Techno 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 Auden Techno, you can compare the effects of market volatilities on Gemtek Technology and Auden Techno 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 Auden Techno. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gemtek Technology and Auden Techno.
Diversification Opportunities for Gemtek Technology and Auden Techno
0.61 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Gemtek and Auden is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Gemtek Technology Co and Auden Techno in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Auden Techno 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 Auden Techno. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Auden Techno has no effect on the direction of Gemtek Technology i.e., Gemtek Technology and Auden Techno go up and down completely randomly.
Pair Corralation between Gemtek Technology and Auden Techno
Assuming the 90 days trading horizon Gemtek Technology Co is expected to generate 0.94 times more return on investment than Auden Techno. However, Gemtek Technology Co is 1.06 times less risky than Auden Techno. It trades about 0.03 of its potential returns per unit of risk. Auden Techno is currently generating about -0.01 per unit of risk. If you would invest 2,735 in Gemtek Technology Co on September 13, 2024 and sell it today you would earn a total of 720.00 from holding Gemtek Technology Co or generate 26.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Gemtek Technology Co vs. Auden Techno
Performance |
| Timeline |
| Gemtek Technology |
| Auden Techno |
Gemtek Technology and Auden Techno Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gemtek Technology and Auden Techno
The main advantage of trading using opposite Gemtek Technology and Auden Techno positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gemtek Technology position performs unexpectedly, Auden Techno 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 Auden Techno will offset losses from the drop in Auden Techno's long position.| Gemtek Technology vs. AU Optronics | Gemtek Technology vs. Innolux Corp | Gemtek Technology vs. Ruentex Development Co | Gemtek Technology vs. WiseChip Semiconductor |
| Auden Techno vs. Gemtek Technology Co | Auden Techno vs. Ruentex Development Co | Auden Techno vs. WiseChip Semiconductor | Auden Techno vs. Novatek Microelectronics 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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