Correlation Between GemVaxKAEL CoLtd and Worldex Industry

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Can any of the company-specific risk be diversified away by investing in both GemVaxKAEL CoLtd and Worldex Industry 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 Worldex Industry into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GemVaxKAEL CoLtd and Worldex Industry Trading, you can compare the effects of market volatilities on GemVaxKAEL CoLtd and Worldex Industry 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 Worldex Industry. Check out your portfolio center. Please also check ongoing floating volatility patterns of GemVaxKAEL CoLtd and Worldex Industry.

Diversification Opportunities for GemVaxKAEL CoLtd and Worldex Industry

0.06
  Correlation Coefficient

Significant diversification

The 3 months correlation between GemVaxKAEL and Worldex is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding GemVaxKAEL CoLtd and Worldex Industry Trading in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Worldex Industry Trading 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 Worldex Industry. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Worldex Industry Trading has no effect on the direction of GemVaxKAEL CoLtd i.e., GemVaxKAEL CoLtd and Worldex Industry go up and down completely randomly.

Pair Corralation between GemVaxKAEL CoLtd and Worldex Industry

Assuming the 90 days trading horizon GemVaxKAEL CoLtd is expected to generate 2.96 times more return on investment than Worldex Industry. However, GemVaxKAEL CoLtd is 2.96 times more volatile than Worldex Industry Trading. It trades about 0.03 of its potential returns per unit of risk. Worldex Industry Trading is currently generating about -0.03 per unit of risk. If you would invest  1,898,000  in GemVaxKAEL CoLtd on October 24, 2024 and sell it today you would lose (13,000) from holding GemVaxKAEL CoLtd or give up 0.68% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

GemVaxKAEL CoLtd  vs.  Worldex Industry Trading

 Performance 
       Timeline  
GemVaxKAEL CoLtd 

Risk-Adjusted Performance

2 of 100

 
Weak
 
Strong
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.
Worldex Industry Trading 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Worldex Industry Trading has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Worldex Industry is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

GemVaxKAEL CoLtd and Worldex Industry Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with GemVaxKAEL CoLtd and Worldex Industry

The main advantage of trading using opposite GemVaxKAEL CoLtd and Worldex Industry positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GemVaxKAEL CoLtd position performs unexpectedly, Worldex Industry 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 Worldex Industry will offset losses from the drop in Worldex Industry's long position.
The idea behind GemVaxKAEL CoLtd and Worldex Industry Trading 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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.

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