Correlation Between Choo Bee and Genetec Technology
Can any of the company-specific risk be diversified away by investing in both Choo Bee and Genetec Technology 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 Choo Bee and Genetec Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Choo Bee Metal and Genetec Technology Bhd, you can compare the effects of market volatilities on Choo Bee and Genetec Technology 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 Choo Bee with a short position of Genetec Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Choo Bee and Genetec Technology.
Diversification Opportunities for Choo Bee and Genetec Technology
0.47 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Choo and Genetec is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding Choo Bee Metal and Genetec Technology Bhd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Genetec Technology Bhd and Choo Bee 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 Choo Bee Metal are associated (or correlated) with Genetec Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Genetec Technology Bhd has no effect on the direction of Choo Bee i.e., Choo Bee and Genetec Technology go up and down completely randomly.
Pair Corralation between Choo Bee and Genetec Technology
Assuming the 90 days trading horizon Choo Bee Metal is expected to under-perform the Genetec Technology. But the stock apears to be less risky and, when comparing its historical volatility, Choo Bee Metal is 3.73 times less risky than Genetec Technology. The stock trades about -0.02 of its potential returns per unit of risk. The Genetec Technology Bhd is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest 72.00 in Genetec Technology Bhd on August 28, 2024 and sell it today you would earn a total of 16.00 from holding Genetec Technology Bhd or generate 22.22% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.24% |
| Values | Daily Returns |
Choo Bee Metal vs. Genetec Technology Bhd
Performance |
| Timeline |
| Choo Bee Metal |
| Genetec Technology Bhd |
Choo Bee and Genetec Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Choo Bee and Genetec Technology
The main advantage of trading using opposite Choo Bee and Genetec Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Choo Bee position performs unexpectedly, Genetec Technology 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 Genetec Technology will offset losses from the drop in Genetec Technology's long position.| Choo Bee vs. Supercomnet Technologies Bhd | Choo Bee vs. Magni Tech Industries | Choo Bee vs. Sunzen Biotech Bhd | Choo Bee vs. ES Ceramics Technology |
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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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