Correlation Between GemVaxKAEL CoLtd and IC Technology

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

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

Diversification Opportunities for GemVaxKAEL CoLtd and IC Technology

0.67

Correlation Coefficient

GemVaxKAEL CoLtd  IC Technology

Poor diversification

The 3 months correlation between GemVaxKAEL and 052860 is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding GemVaxKAEL CoLtd and IC Technology Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on IC Technology and GemVaxKAEL CoLtd 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 GemVaxKAEL CoLtd are associated (or correlated) with IC Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of IC Technology has no effect on the direction of GemVaxKAEL CoLtd i.e., GemVaxKAEL CoLtd and IC Technology go up and down completely randomly.

Pair Corralation between GemVaxKAEL CoLtd and IC Technology

Assuming the 90 days trading horizon GemVaxKAEL CoLtd is expected to generate 1.68 times more return on investment than IC Technology. However, GemVaxKAEL CoLtd is 1.68 times more volatile than IC Technology Co. It trades about 0.4 of its potential returns per unit of risk. IC Technology Co is currently generating about 0.02 per unit of risk. If you would invest  1,413,000  in GemVaxKAEL CoLtd on December 25, 2024 and sell it today you would earn a total of  2,557,000  from holding GemVaxKAEL CoLtd or generate 180.96% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	98.25%
Values	Daily Returns

GemVaxKAEL CoLtd  vs.  IC Technology Co

GemVaxKAEL CoLtd

Risk-Adjusted Performance

Very Strong

Compared to the overall equity markets, risk-adjusted returns on investments in GemVaxKAEL CoLtd are ranked lower than 31 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, GemVaxKAEL CoLtd sustained solid returns over the last few months and may actually be approaching a breakup point.

IC Technology

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in IC Technology Co are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, IC Technology is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with GemVaxKAEL CoLtd and IC Technology

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

The idea behind GemVaxKAEL CoLtd and IC Technology Co 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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .