Correlation Between Spirox Corp and Gemtek Technology

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

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

Diversification Opportunities for Spirox Corp and Gemtek Technology

0.08

Correlation Coefficient

Spirox Corp  Gemtek Technology

Significant diversification

The 3 months correlation between Spirox and Gemtek is 0.08. Overlapping area represents the amount of risk that can be diversified away by holding Spirox Corp and Gemtek Technology Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gemtek Technology and Spirox Corp 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 Spirox Corp are associated (or correlated) with Gemtek Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gemtek Technology has no effect on the direction of Spirox Corp i.e., Spirox Corp and Gemtek Technology go up and down completely randomly.

Pair Corralation between Spirox Corp and Gemtek Technology

Assuming the 90 days trading horizon Spirox Corp is expected to generate 1.92 times more return on investment than Gemtek Technology. However, Spirox Corp is 1.92 times more volatile than Gemtek Technology Co. It trades about 0.11 of its potential returns per unit of risk. Gemtek Technology Co is currently generating about -0.05 per unit of risk. If you would invest  6,240  in Spirox Corp on December 24, 2024 and sell it today you would earn a total of  930.00  from holding Spirox Corp or generate 14.9% return on investment over 90 days.

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

Spirox Corp  vs.  Gemtek Technology Co

Spirox Corp

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Spirox Corp are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, Spirox Corp showed solid returns over the last few months and may actually be approaching a breakup point.

Gemtek Technology

Risk-Adjusted Performance

Very Weak

Over the last 90 days Gemtek Technology Co has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, Gemtek Technology is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pair Trading with Spirox Corp and Gemtek Technology

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

The idea behind Spirox Corp and Gemtek Technology 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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.