Correlation Between Greatech Technology and Daya Materials

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

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

Diversification Opportunities for Greatech Technology and Daya Materials

-0.39

Correlation Coefficient

Greatech Technology  Daya Materials

Very good diversification

The 3 months correlation between Greatech and Daya is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding Greatech Technology Bhd and Daya Materials Bhd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Daya Materials Bhd and Greatech 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 Greatech Technology Bhd are associated (or correlated) with Daya Materials. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Daya Materials Bhd has no effect on the direction of Greatech Technology i.e., Greatech Technology and Daya Materials go up and down completely randomly.

Pair Corralation between Greatech Technology and Daya Materials

Assuming the 90 days trading horizon Greatech Technology Bhd is expected to generate 0.53 times more return on investment than Daya Materials. However, Greatech Technology Bhd is 1.89 times less risky than Daya Materials. It trades about 0.02 of its potential returns per unit of risk. Daya Materials Bhd is currently generating about -0.04 per unit of risk. If you would invest  221.00  in Greatech Technology Bhd on September 12, 2024 and sell it today you would earn a total of  2.00  from holding Greatech Technology Bhd or generate 0.9% return on investment over 90 days.

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

Greatech Technology Bhd  vs.  Daya Materials Bhd

Greatech Technology Bhd

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Greatech Technology Bhd are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. 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.

Daya Materials Bhd

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Daya Materials 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.

Pair Trading with Greatech Technology and Daya Materials

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

The idea behind Greatech Technology Bhd and Daya Materials 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.