Correlation Between Gemtek Technology and Wonderful
Can any of the company-specific risk be diversified away by investing in both Gemtek Technology and Wonderful 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 Wonderful 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 Wonderful Hi Tech Co, you can compare the effects of market volatilities on Gemtek Technology and Wonderful 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 Wonderful. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gemtek Technology and Wonderful.
Diversification Opportunities for Gemtek Technology and Wonderful
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Gemtek and Wonderful is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Gemtek Technology Co and Wonderful Hi Tech Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wonderful Hi Tech 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 Wonderful. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wonderful Hi Tech has no effect on the direction of Gemtek Technology i.e., Gemtek Technology and Wonderful go up and down completely randomly.
Pair Corralation between Gemtek Technology and Wonderful
Assuming the 90 days trading horizon Gemtek Technology Co is expected to generate 0.6 times more return on investment than Wonderful. However, Gemtek Technology Co is 1.66 times less risky than Wonderful. It trades about -0.02 of its potential returns per unit of risk. Wonderful Hi Tech Co is currently generating about -0.04 per unit of risk. If you would invest 3,635 in Gemtek Technology Co on September 3, 2024 and sell it today you would lose (35.00) from holding Gemtek Technology Co or give up 0.96% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Gemtek Technology Co vs. Wonderful Hi Tech Co
Performance |
| Timeline |
| Gemtek Technology |
| Wonderful Hi Tech |
Gemtek Technology and Wonderful Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gemtek Technology and Wonderful
The main advantage of trading using opposite Gemtek Technology and Wonderful positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gemtek Technology position performs unexpectedly, Wonderful 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 Wonderful will offset losses from the drop in Wonderful's long position.| Gemtek Technology vs. Taiwan Semiconductor Manufacturing | Gemtek Technology vs. Yang Ming Marine | Gemtek Technology vs. ASE Industrial Holding | Gemtek Technology vs. AU Optronics |
| Wonderful vs. Accton Technology Corp | Wonderful vs. Wistron NeWeb Corp | Wonderful vs. Alpha Networks | Wonderful vs. Gemtek Technology Co |
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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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