Correlation Between General Commercial and Performance Technologies
Can any of the company-specific risk be diversified away by investing in both General Commercial and Performance Technologies 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 General Commercial and Performance Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between General Commercial Industrial and Performance Technologies SA, you can compare the effects of market volatilities on General Commercial and Performance Technologies 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 General Commercial with a short position of Performance Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of General Commercial and Performance Technologies.
Diversification Opportunities for General Commercial and Performance Technologies
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between General and Performance is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding General Commercial Industrial and Performance Technologies SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Performance Technologies and General Commercial 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 General Commercial Industrial are associated (or correlated) with Performance Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Performance Technologies has no effect on the direction of General Commercial i.e., General Commercial and Performance Technologies go up and down completely randomly.
Pair Corralation between General Commercial and Performance Technologies
Assuming the 90 days trading horizon General Commercial Industrial is expected to generate 0.72 times more return on investment than Performance Technologies. However, General Commercial Industrial is 1.38 times less risky than Performance Technologies. It trades about -0.01 of its potential returns per unit of risk. Performance Technologies SA is currently generating about -0.2 per unit of risk. If you would invest 131.00 in General Commercial Industrial on September 2, 2024 and sell it today you would lose (1.00) from holding General Commercial Industrial or give up 0.76% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
General Commercial Industrial vs. Performance Technologies SA
Performance |
| Timeline |
| General Commercial |
| Performance Technologies |
General Commercial and Performance Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with General Commercial and Performance Technologies
The main advantage of trading using opposite General Commercial and Performance Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if General Commercial position performs unexpectedly, Performance Technologies 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 Performance Technologies will offset losses from the drop in Performance Technologies' long position.| General Commercial vs. Ekter SA | General Commercial vs. Elton International Trading | General Commercial vs. Piraeus Port Authority | General Commercial vs. Hellenic Petroleum SA |
| Performance Technologies vs. Quest Holdings SA | Performance Technologies vs. CPI Computer Peripherals | Performance Technologies vs. National Bank of | Performance Technologies vs. EL D Mouzakis |
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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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