Correlation Between GKHT Medical and Titan Wind

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

By analyzing existing cross correlation between GKHT Medical Technology and Titan Wind Energy, you can compare the effects of market volatilities on GKHT Medical and Titan Wind 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 GKHT Medical with a short position of Titan Wind. Check out your portfolio center. Please also check ongoing floating volatility patterns of GKHT Medical and Titan Wind.

Diversification Opportunities for GKHT Medical and Titan Wind

0.94

Correlation Coefficient

GKHT Medical  Titan Wind

Almost no diversification

The 3 months correlation between GKHT and Titan is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding GKHT Medical Technology and Titan Wind Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Titan Wind Energy and GKHT Medical 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 GKHT Medical Technology are associated (or correlated) with Titan Wind. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Titan Wind Energy has no effect on the direction of GKHT Medical i.e., GKHT Medical and Titan Wind go up and down completely randomly.

Pair Corralation between GKHT Medical and Titan Wind

Assuming the 90 days trading horizon GKHT Medical Technology is expected to generate 1.03 times more return on investment than Titan Wind. However, GKHT Medical is 1.03 times more volatile than Titan Wind Energy. It trades about 0.15 of its potential returns per unit of risk. Titan Wind Energy is currently generating about 0.14 per unit of risk. If you would invest  914.00  in GKHT Medical Technology on September 12, 2024 and sell it today you would earn a total of  298.00  from holding GKHT Medical Technology or generate 32.6% return on investment over 90 days.

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

GKHT Medical Technology  vs.  Titan Wind Energy

GKHT Medical Technology

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in GKHT Medical Technology are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, GKHT Medical sustained solid returns over the last few months and may actually be approaching a breakup point.

Titan Wind Energy

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Titan Wind Energy are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Titan Wind sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with GKHT Medical and Titan Wind

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

The idea behind GKHT Medical Technology and Titan Wind Energy 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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.