Correlation Between Gamatronic Electronic and Direct Capital
Can any of the company-specific risk be diversified away by investing in both Gamatronic Electronic and Direct Capital 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 Gamatronic Electronic and Direct Capital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Gamatronic Electronic Industries and Direct Capital Investments, you can compare the effects of market volatilities on Gamatronic Electronic and Direct Capital 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 Gamatronic Electronic with a short position of Direct Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gamatronic Electronic and Direct Capital.
Diversification Opportunities for Gamatronic Electronic and Direct Capital
0.48 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Gamatronic and Direct is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding Gamatronic Electronic Industri and Direct Capital Investments in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Direct Capital Inves and Gamatronic Electronic 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 Gamatronic Electronic Industries are associated (or correlated) with Direct Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Direct Capital Inves has no effect on the direction of Gamatronic Electronic i.e., Gamatronic Electronic and Direct Capital go up and down completely randomly.
Pair Corralation between Gamatronic Electronic and Direct Capital
Assuming the 90 days trading horizon Gamatronic Electronic Industries is expected to under-perform the Direct Capital. But the stock apears to be less risky and, when comparing its historical volatility, Gamatronic Electronic Industries is 14.94 times less risky than Direct Capital. The stock trades about -0.04 of its potential returns per unit of risk. The Direct Capital Investments is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 7,240 in Direct Capital Investments on August 26, 2024 and sell it today you would earn a total of 86,460 from holding Direct Capital Investments or generate 1194.2% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Gamatronic Electronic Industri vs. Direct Capital Investments
Performance |
| Timeline |
| Gamatronic Electronic |
| Direct Capital Inves |
Gamatronic Electronic and Direct Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gamatronic Electronic and Direct Capital
The main advantage of trading using opposite Gamatronic Electronic and Direct Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gamatronic Electronic position performs unexpectedly, Direct Capital 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 Direct Capital will offset losses from the drop in Direct Capital's long position.| Gamatronic Electronic vs. Direct Capital Investments | Gamatronic Electronic vs. Brainsway | Gamatronic Electronic vs. Mivne Real Estate | Gamatronic Electronic vs. Photomyne |
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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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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