Correlation Between Posiflex Technology and Genovate Biotechnology
Can any of the company-specific risk be diversified away by investing in both Posiflex 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 Posiflex 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 Posiflex Technology and Genovate Biotechnology Co, you can compare the effects of market volatilities on Posiflex 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 Posiflex Technology with a short position of Genovate Biotechnology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Posiflex Technology and Genovate Biotechnology.
Diversification Opportunities for Posiflex Technology and Genovate Biotechnology
-0.47 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Posiflex and Genovate is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding Posiflex Technology and Genovate Biotechnology Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Genovate Biotechnology and Posiflex 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 Posiflex Technology 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 Posiflex Technology i.e., Posiflex Technology and Genovate Biotechnology go up and down completely randomly.
Pair Corralation between Posiflex Technology and Genovate Biotechnology
Assuming the 90 days trading horizon Posiflex Technology is expected to generate 6.11 times more return on investment than Genovate Biotechnology. However, Posiflex Technology is 6.11 times more volatile than Genovate Biotechnology Co. It trades about 0.59 of its potential returns per unit of risk. Genovate Biotechnology Co is currently generating about -0.27 per unit of risk. If you would invest 22,900 in Posiflex Technology on September 12, 2024 and sell it today you would earn a total of 10,750 from holding Posiflex Technology or generate 46.94% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Posiflex Technology vs. Genovate Biotechnology Co
Performance |
| Timeline |
| Posiflex Technology |
| Genovate Biotechnology |
Posiflex Technology and Genovate Biotechnology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Posiflex Technology and Genovate Biotechnology
The main advantage of trading using opposite Posiflex Technology and Genovate Biotechnology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Posiflex 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.| Posiflex Technology vs. AU Optronics | Posiflex Technology vs. Innolux Corp | Posiflex Technology vs. Ruentex Development Co | Posiflex Technology vs. WiseChip Semiconductor |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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