Correlation Between MITECH CoLtd and GS Retail

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

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

Diversification Opportunities for MITECH CoLtd and GS Retail

-0.01

Correlation Coefficient

MITECH CoLtd  GS Retail

Good diversification

The 3 months correlation between MITECH and 007070 is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding MITECH CoLtd and GS Retail Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GS Retail and MITECH 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 MITECH CoLtd are associated (or correlated) with GS Retail. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GS Retail has no effect on the direction of MITECH CoLtd i.e., MITECH CoLtd and GS Retail go up and down completely randomly.

Pair Corralation between MITECH CoLtd and GS Retail

Assuming the 90 days trading horizon MITECH CoLtd is expected to generate 1.41 times more return on investment than GS Retail. However, MITECH CoLtd is 1.41 times more volatile than GS Retail Co. It trades about -0.03 of its potential returns per unit of risk. GS Retail Co is currently generating about -0.16 per unit of risk. If you would invest  801,890  in MITECH CoLtd on December 24, 2024 and sell it today you would lose (41,890) from holding MITECH CoLtd or give up 5.22% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.28%
Values	Daily Returns

MITECH CoLtd  vs.  GS Retail Co

MITECH CoLtd

Risk-Adjusted Performance

Very Weak

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

GS Retail

Risk-Adjusted Performance

Very Weak

Over the last 90 days GS Retail Co has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with MITECH CoLtd and GS Retail

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

The idea behind MITECH CoLtd and GS Retail 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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.