Correlation Between GemVaxKAEL CoLtd and System

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

By analyzing existing cross correlation between GemVaxKAEL CoLtd and System and Application, you can compare the effects of market volatilities on GemVaxKAEL CoLtd and System 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 System. Check out your portfolio center. Please also check ongoing floating volatility patterns of GemVaxKAEL CoLtd and System.

Diversification Opportunities for GemVaxKAEL CoLtd and System

0.08

Correlation Coefficient

GemVaxKAEL CoLtd  System

Significant diversification

The 3 months correlation between GemVaxKAEL and System is 0.08. Overlapping area represents the amount of risk that can be diversified away by holding GemVaxKAEL CoLtd and System and Application in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on System and Application 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 System. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of System and Application has no effect on the direction of GemVaxKAEL CoLtd i.e., GemVaxKAEL CoLtd and System go up and down completely randomly.

Pair Corralation between GemVaxKAEL CoLtd and System

Assuming the 90 days trading horizon GemVaxKAEL CoLtd is expected to generate 208.89 times less return on investment than System. But when comparing it to its historical volatility, GemVaxKAEL CoLtd is 1.48 times less risky than System. It trades about 0.0 of its potential returns per unit of risk. System and Application is currently generating about 0.26 of returns per unit of risk over similar time horizon. If you would invest  121,675  in System and Application on October 10, 2024 and sell it today you would earn a total of  34,425  from holding System and Application or generate 28.29% return on investment over 90 days.

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

GemVaxKAEL CoLtd  vs.  System and Application

GemVaxKAEL CoLtd

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days GemVaxKAEL CoLtd has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

System and Application

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in System and Application are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, System may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with GemVaxKAEL CoLtd and System

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

The idea behind GemVaxKAEL CoLtd and System and Application 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.

Check out your portfolio center.

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 Commodity Directory module to find actively traded commodities issued by global exchanges.