Correlation Between Inari Amertron and Greatech Technology

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

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

Diversification Opportunities for Inari Amertron and Greatech Technology

0.42

Correlation Coefficient

Inari Amertron  Greatech Technology

Very weak diversification

The 3 months correlation between Inari and Greatech is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding Inari Amertron Bhd and Greatech Technology Bhd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Greatech Technology Bhd and Inari Amertron 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 Inari Amertron Bhd are associated (or correlated) with Greatech Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Greatech Technology Bhd has no effect on the direction of Inari Amertron i.e., Inari Amertron and Greatech Technology go up and down completely randomly.

Pair Corralation between Inari Amertron and Greatech Technology

Assuming the 90 days trading horizon Inari Amertron Bhd is expected to under-perform the Greatech Technology. In addition to that, Inari Amertron is 1.08 times more volatile than Greatech Technology Bhd. It trades about -0.4 of its total potential returns per unit of risk. Greatech Technology Bhd is currently generating about -0.18 per unit of volatility. If you would invest  229.00  in Greatech Technology Bhd on October 26, 2024 and sell it today you would lose (15.00) from holding Greatech Technology Bhd or give up 6.55% of portfolio value over 90 days.

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

Inari Amertron Bhd  vs.  Greatech Technology Bhd

Inari Amertron Bhd

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Inari Amertron Bhd has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest conflicting performance, the Stock's basic indicators remain persistent and the latest mess on Wall Street may also be a sign of long-standing gains for the company institutional investors.

Greatech Technology Bhd

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Greatech Technology Bhd has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent basic indicators, Greatech Technology is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

Pair Trading with Inari Amertron and Greatech Technology

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

The idea behind Inari Amertron Bhd and Greatech Technology 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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.