Correlation Between Gemtek Technology and Alpha Networks
Can any of the company-specific risk be diversified away by investing in both Gemtek Technology and Alpha Networks 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 Alpha Networks 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 Alpha Networks, you can compare the effects of market volatilities on Gemtek Technology and Alpha Networks 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 Alpha Networks. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gemtek Technology and Alpha Networks.
Diversification Opportunities for Gemtek Technology and Alpha Networks
-0.42 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Gemtek and Alpha is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding Gemtek Technology Co and Alpha Networks in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alpha Networks 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 Alpha Networks. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alpha Networks has no effect on the direction of Gemtek Technology i.e., Gemtek Technology and Alpha Networks go up and down completely randomly.
Pair Corralation between Gemtek Technology and Alpha Networks
Assuming the 90 days trading horizon Gemtek Technology Co is expected to generate 0.97 times more return on investment than Alpha Networks. However, Gemtek Technology Co is 1.03 times less risky than Alpha Networks. It trades about 0.03 of its potential returns per unit of risk. Alpha Networks is currently generating about 0.02 per unit of risk. If you would invest 2,865 in Gemtek Technology Co on August 26, 2024 and sell it today you would earn a total of 700.00 from holding Gemtek Technology Co or generate 24.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Gemtek Technology Co vs. Alpha Networks
Performance |
| Timeline |
| Gemtek Technology |
| Alpha Networks |
Gemtek Technology and Alpha Networks Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gemtek Technology and Alpha Networks
The main advantage of trading using opposite Gemtek Technology and Alpha Networks positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gemtek Technology position performs unexpectedly, Alpha Networks 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 Alpha Networks will offset losses from the drop in Alpha Networks' long position.| Gemtek Technology vs. D Link Corp | Gemtek Technology vs. Sunplus Technology Co | Gemtek Technology vs. Silitech Technology Corp | Gemtek Technology vs. Zinwell |
| Alpha Networks vs. Gemtek Technology Co | Alpha Networks vs. D Link Corp | Alpha Networks vs. Accton Technology Corp | Alpha Networks vs. Wistron NeWeb 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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