Correlation Between Aker Technology and Genovate Biotechnology
Can any of the company-specific risk be diversified away by investing in both Aker Technology and Genovate Biotechnology 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 Aker Technology and Genovate Biotechnology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aker Technology Co and Genovate Biotechnology Co, you can compare the effects of market volatilities on Aker Technology and Genovate Biotechnology 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 Aker Technology with a short position of Genovate Biotechnology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aker Technology and Genovate Biotechnology.
Diversification Opportunities for Aker Technology and Genovate Biotechnology
-0.13 | Correlation Coefficient |
Good diversification
The 3 months correlation between Aker and Genovate is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding Aker Technology Co and Genovate Biotechnology Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Genovate Biotechnology and Aker 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 Aker Technology Co are associated (or correlated) with Genovate Biotechnology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Genovate Biotechnology has no effect on the direction of Aker Technology i.e., Aker Technology and Genovate Biotechnology go up and down completely randomly.
Pair Corralation between Aker Technology and Genovate Biotechnology
Assuming the 90 days trading horizon Aker Technology Co is expected to generate 8.92 times more return on investment than Genovate Biotechnology. However, Aker Technology is 8.92 times more volatile than Genovate Biotechnology Co. It trades about 0.28 of its potential returns per unit of risk. Genovate Biotechnology Co is currently generating about -0.18 per unit of risk. If you would invest 2,130 in Aker Technology Co on September 1, 2024 and sell it today you would earn a total of 610.00 from holding Aker Technology Co or generate 28.64% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aker Technology Co vs. Genovate Biotechnology Co
Performance |
| Timeline |
| Aker Technology |
| Genovate Biotechnology |
Aker Technology and Genovate Biotechnology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aker Technology and Genovate Biotechnology
The main advantage of trading using opposite Aker Technology and Genovate Biotechnology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aker Technology position performs unexpectedly, Genovate Biotechnology 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 Genovate Biotechnology will offset losses from the drop in Genovate Biotechnology's long position.| Aker Technology vs. Hon Hai Precision | Aker Technology vs. Delta Electronics | Aker Technology vs. LARGAN Precision Co | Aker Technology vs. Yageo Corp |
| Genovate Biotechnology vs. Aker Technology Co | Genovate Biotechnology vs. V Tac Technology Co | Genovate Biotechnology vs. Tainet Communication System | Genovate Biotechnology vs. Microelectronics 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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