Correlation Between BRIM Biotechnology and GrandTech
Can any of the company-specific risk be diversified away by investing in both BRIM Biotechnology and GrandTech 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 BRIM Biotechnology and GrandTech into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BRIM Biotechnology and GrandTech CG Systems, you can compare the effects of market volatilities on BRIM Biotechnology and GrandTech 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 BRIM Biotechnology with a short position of GrandTech. Check out your portfolio center. Please also check ongoing floating volatility patterns of BRIM Biotechnology and GrandTech.
Diversification Opportunities for BRIM Biotechnology and GrandTech
0.06 | Correlation Coefficient |
Significant diversification
The 3 months correlation between BRIM and GrandTech is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding BRIM Biotechnology and GrandTech CG Systems in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GrandTech CG Systems and BRIM Biotechnology 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 BRIM Biotechnology are associated (or correlated) with GrandTech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GrandTech CG Systems has no effect on the direction of BRIM Biotechnology i.e., BRIM Biotechnology and GrandTech go up and down completely randomly.
Pair Corralation between BRIM Biotechnology and GrandTech
Assuming the 90 days trading horizon BRIM Biotechnology is expected to generate 2.04 times more return on investment than GrandTech. However, BRIM Biotechnology is 2.04 times more volatile than GrandTech CG Systems. It trades about 0.23 of its potential returns per unit of risk. GrandTech CG Systems is currently generating about 0.3 per unit of risk. If you would invest 2,900 in BRIM Biotechnology on November 28, 2024 and sell it today you would earn a total of 115.00 from holding BRIM Biotechnology or generate 3.97% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 58.82% |
| Values | Daily Returns |
BRIM Biotechnology vs. GrandTech CG Systems
Performance |
| Timeline |
| BRIM Biotechnology |
Risk-Adjusted Performance
Very Weak
Weak | Strong |
| GrandTech CG Systems |
BRIM Biotechnology and GrandTech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BRIM Biotechnology and GrandTech
The main advantage of trading using opposite BRIM Biotechnology and GrandTech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BRIM Biotechnology position performs unexpectedly, GrandTech 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 GrandTech will offset losses from the drop in GrandTech's long position.| BRIM Biotechnology vs. Quang Viet Enterprise | BRIM Biotechnology vs. Li Peng Enterprise | BRIM Biotechnology vs. Shinkong Synthetic Fiber | BRIM Biotechnology vs. Evertex Fabrinology |
| GrandTech vs. Elan Microelectronics Corp | GrandTech vs. Cameo Communications | GrandTech vs. Far EasTone Telecommunications | GrandTech vs. Tai Tung Communication |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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