Correlation Between Risuntek and Shenzhen Genvict

Can any of the company-specific risk be diversified away by investing in both Risuntek and Shenzhen Genvict 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 Risuntek and Shenzhen Genvict into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Risuntek and Shenzhen Genvict Technologies, you can compare the effects of market volatilities on Risuntek and Shenzhen Genvict 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 Risuntek with a short position of Shenzhen Genvict. Check out your portfolio center. Please also check ongoing floating volatility patterns of Risuntek and Shenzhen Genvict.

Diversification Opportunities for Risuntek and Shenzhen Genvict

0.71

Correlation Coefficient

Risuntek  Shenzhen Genvict

Poor diversification

The 3 months correlation between Risuntek and Shenzhen is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Risuntek and Shenzhen Genvict Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shenzhen Genvict Tec and Risuntek 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 Risuntek are associated (or correlated) with Shenzhen Genvict. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shenzhen Genvict Tec has no effect on the direction of Risuntek i.e., Risuntek and Shenzhen Genvict go up and down completely randomly.

Pair Corralation between Risuntek and Shenzhen Genvict

Assuming the 90 days trading horizon Risuntek is expected to generate 1.02 times more return on investment than Shenzhen Genvict. However, Risuntek is 1.02 times more volatile than Shenzhen Genvict Technologies. It trades about 0.11 of its potential returns per unit of risk. Shenzhen Genvict Technologies is currently generating about 0.12 per unit of risk. If you would invest  1,982  in Risuntek on September 2, 2024 and sell it today you would earn a total of  520.00  from holding Risuntek or generate 26.24% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

Risuntek  vs.  Shenzhen Genvict Technologies

Risuntek

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Risuntek are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Risuntek sustained solid returns over the last few months and may actually be approaching a breakup point.

Shenzhen Genvict Tec

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Shenzhen Genvict Technologies are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Shenzhen Genvict sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Risuntek and Shenzhen Genvict

The main advantage of trading using opposite Risuntek and Shenzhen Genvict positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Risuntek position performs unexpectedly, Shenzhen Genvict 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 Shenzhen Genvict will offset losses from the drop in Shenzhen Genvict's long position.

The idea behind Risuntek and Shenzhen Genvict Technologies pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.