Correlation Between Genetec Technology and Pentamaster Bhd

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

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

Diversification Opportunities for Genetec Technology and Pentamaster Bhd

0.5

Correlation Coefficient

Genetec Technology  Pentamaster Bhd

Very weak diversification

The 3 months correlation between Genetec and Pentamaster is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding Genetec Technology Bhd and Pentamaster Bhd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pentamaster Bhd and Genetec Technology 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 Genetec Technology Bhd are associated (or correlated) with Pentamaster Bhd. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pentamaster Bhd has no effect on the direction of Genetec Technology i.e., Genetec Technology and Pentamaster Bhd go up and down completely randomly.

Pair Corralation between Genetec Technology and Pentamaster Bhd

Assuming the 90 days trading horizon Genetec Technology Bhd is expected to under-perform the Pentamaster Bhd. In addition to that, Genetec Technology is 1.96 times more volatile than Pentamaster Bhd. It trades about -0.03 of its total potential returns per unit of risk. Pentamaster Bhd is currently generating about -0.02 per unit of volatility. If you would invest  483.00  in Pentamaster Bhd on September 28, 2024 and sell it today you would lose (60.00) from holding Pentamaster Bhd or give up 12.42% of portfolio value over 90 days.

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

Genetec Technology Bhd  vs.  Pentamaster Bhd

Genetec Technology Bhd

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Genetec Technology Bhd are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting basic indicators, Genetec Technology disclosed solid returns over the last few months and may actually be approaching a breakup point.

Pentamaster Bhd

Risk-Adjusted Performance

9 of 100

OK

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

Pair Trading with Genetec Technology and Pentamaster Bhd

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

The idea behind Genetec Technology Bhd and Pentamaster Bhd 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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.