Correlation Between GemVaxKAEL CoLtd and Carriesoft

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

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

Diversification Opportunities for GemVaxKAEL CoLtd and Carriesoft

-0.48

Correlation Coefficient

GemVaxKAEL CoLtd  Carriesoft

Very good diversification

The 3 months correlation between GemVaxKAEL and Carriesoft is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding GemVaxKAEL CoLtd and Carriesoft Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Carriesoft 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 Carriesoft. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Carriesoft has no effect on the direction of GemVaxKAEL CoLtd i.e., GemVaxKAEL CoLtd and Carriesoft go up and down completely randomly.

Pair Corralation between GemVaxKAEL CoLtd and Carriesoft

Assuming the 90 days trading horizon GemVaxKAEL CoLtd is expected to under-perform the Carriesoft. In addition to that, GemVaxKAEL CoLtd is 1.28 times more volatile than Carriesoft Co. It trades about -0.03 of its total potential returns per unit of risk. Carriesoft Co is currently generating about 0.1 per unit of volatility. If you would invest  370,000  in Carriesoft Co on October 4, 2024 and sell it today you would earn a total of  103,500  from holding Carriesoft Co or generate 27.97% return on investment over 90 days.

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

GemVaxKAEL CoLtd  vs.  Carriesoft Co

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.

Carriesoft

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Carriesoft Co are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Carriesoft sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with GemVaxKAEL CoLtd and Carriesoft

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

The idea behind GemVaxKAEL CoLtd and Carriesoft 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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.