Correlation Between GemVaxKAEL CoLtd and Global Standard

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

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

Diversification Opportunities for GemVaxKAEL CoLtd and Global Standard

0.28

Correlation Coefficient

GemVaxKAEL CoLtd  Global Standard

Modest diversification

The 3 months correlation between GemVaxKAEL and Global is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding GemVaxKAEL CoLtd and Global Standard Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global Standard Tech 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 Global Standard. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Global Standard Tech has no effect on the direction of GemVaxKAEL CoLtd i.e., GemVaxKAEL CoLtd and Global Standard go up and down completely randomly.

Pair Corralation between GemVaxKAEL CoLtd and Global Standard

Assuming the 90 days trading horizon GemVaxKAEL CoLtd is expected to generate 1.61 times less return on investment than Global Standard. In addition to that, GemVaxKAEL CoLtd is 1.97 times more volatile than Global Standard Technology. It trades about 0.03 of its total potential returns per unit of risk. Global Standard Technology is currently generating about 0.11 per unit of volatility. If you would invest  1,502,921  in Global Standard Technology on October 24, 2024 and sell it today you would earn a total of  312,079  from holding Global Standard Technology or generate 20.76% return on investment over 90 days.

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

GemVaxKAEL CoLtd  vs.  Global Standard Technology

GemVaxKAEL CoLtd

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in GemVaxKAEL CoLtd are ranked lower than 2 (%) 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.

Global Standard Tech

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Global Standard Technology are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Global Standard sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with GemVaxKAEL CoLtd and Global Standard

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

The idea behind GemVaxKAEL CoLtd and Global Standard Technology 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 Equity Valuation module to check real value of public entities based on technical and fundamental data.