Correlation Between Dynamic Precision and Greatek Electronics
Can any of the company-specific risk be diversified away by investing in both Dynamic Precision and Greatek Electronics 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 Dynamic Precision and Greatek Electronics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dynamic Precision Industry and Greatek Electronics, you can compare the effects of market volatilities on Dynamic Precision and Greatek Electronics 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 Dynamic Precision with a short position of Greatek Electronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dynamic Precision and Greatek Electronics.
Diversification Opportunities for Dynamic Precision and Greatek Electronics
0.05 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Dynamic and Greatek is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding Dynamic Precision Industry and Greatek Electronics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Greatek Electronics and Dynamic Precision 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 Dynamic Precision Industry are associated (or correlated) with Greatek Electronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Greatek Electronics has no effect on the direction of Dynamic Precision i.e., Dynamic Precision and Greatek Electronics go up and down completely randomly.
Pair Corralation between Dynamic Precision and Greatek Electronics
Assuming the 90 days trading horizon Dynamic Precision Industry is expected to under-perform the Greatek Electronics. But the stock apears to be less risky and, when comparing its historical volatility, Dynamic Precision Industry is 2.05 times less risky than Greatek Electronics. The stock trades about -0.14 of its potential returns per unit of risk. The Greatek Electronics is currently generating about -0.02 of returns per unit of risk over similar time horizon. If you would invest 5,770 in Greatek Electronics on August 25, 2024 and sell it today you would lose (60.00) from holding Greatek Electronics or give up 1.04% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dynamic Precision Industry vs. Greatek Electronics
Performance |
| Timeline |
| Dynamic Precision |
| Greatek Electronics |
Dynamic Precision and Greatek Electronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dynamic Precision and Greatek Electronics
The main advantage of trading using opposite Dynamic Precision and Greatek Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dynamic Precision position performs unexpectedly, Greatek Electronics 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 Greatek Electronics will offset losses from the drop in Greatek Electronics' long position.| Dynamic Precision vs. International CSRC Investment | Dynamic Precision vs. Far EasTone Telecommunications | Dynamic Precision vs. Tai Tung Communication | Dynamic Precision vs. Tehmag Foods |
| Greatek Electronics vs. Novatek Microelectronics Corp | Greatek Electronics vs. Quanta Computer | Greatek Electronics vs. United Microelectronics |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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