Correlation Between Gamatronic Electronic and Israel China
Can any of the company-specific risk be diversified away by investing in both Gamatronic Electronic and Israel China 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 Israel China 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 Israel China Biotechnology, you can compare the effects of market volatilities on Gamatronic Electronic and Israel China 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 Israel China. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gamatronic Electronic and Israel China.
Diversification Opportunities for Gamatronic Electronic and Israel China
0.43 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Gamatronic and Israel is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding Gamatronic Electronic Industri and Israel China Biotechnology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Israel China Biotech 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 Israel China. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Israel China Biotech has no effect on the direction of Gamatronic Electronic i.e., Gamatronic Electronic and Israel China go up and down completely randomly.
Pair Corralation between Gamatronic Electronic and Israel China
Assuming the 90 days trading horizon Gamatronic Electronic Industries is expected to generate 0.69 times more return on investment than Israel China. However, Gamatronic Electronic Industries is 1.45 times less risky than Israel China. It trades about -0.05 of its potential returns per unit of risk. Israel China Biotechnology is currently generating about -0.08 per unit of risk. If you would invest 115,400 in Gamatronic Electronic Industries on August 30, 2024 and sell it today you would lose (19,400) from holding Gamatronic Electronic Industries or give up 16.81% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Gamatronic Electronic Industri vs. Israel China Biotechnology
Performance |
| Timeline |
| Gamatronic Electronic |
| Israel China Biotech |
Gamatronic Electronic and Israel China Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gamatronic Electronic and Israel China
The main advantage of trading using opposite Gamatronic Electronic and Israel China positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gamatronic Electronic position performs unexpectedly, Israel China 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 Israel China will offset losses from the drop in Israel China's long position.| Gamatronic Electronic vs. Direct Capital Investments | Gamatronic Electronic vs. B Communications | Gamatronic Electronic vs. Holmes Place International | Gamatronic Electronic vs. Nova |
| Israel China vs. Suny Cellular Communication | Israel China vs. Arad Investment Industrial | Israel China vs. GODM Investments | Israel China vs. Hiron Trade Investments Industrial |
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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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