Correlation Between GeoVision and Flytech Technology

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

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

Diversification Opportunities for GeoVision and Flytech Technology

0.39

Correlation Coefficient

GeoVision  Flytech Technology

Weak diversification

The 3 months correlation between GeoVision and Flytech is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding GeoVision and Flytech Technology Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Flytech Technology and GeoVision 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 GeoVision are associated (or correlated) with Flytech Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Flytech Technology has no effect on the direction of GeoVision i.e., GeoVision and Flytech Technology go up and down completely randomly.

Pair Corralation between GeoVision and Flytech Technology

Assuming the 90 days trading horizon GeoVision is expected to under-perform the Flytech Technology. But the stock apears to be less risky and, when comparing its historical volatility, GeoVision is 1.02 times less risky than Flytech Technology. The stock trades about -0.34 of its potential returns per unit of risk. The Flytech Technology Co is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest  8,400  in Flytech Technology Co on October 8, 2024 and sell it today you would earn a total of  270.00  from holding Flytech Technology Co or generate 3.21% return on investment over 90 days.

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

GeoVision  vs.  Flytech Technology Co

GeoVision

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days GeoVision has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest abnormal performance, the Stock's basic indicators remain stable and the latest fuss on Wall Street may also be a sign of long-term gains for the venture sophisticated investors.

Flytech Technology

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Flytech Technology Co are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of fairly stable basic indicators, Flytech 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 GeoVision and Flytech Technology

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

The idea behind GeoVision and Flytech 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.

Check out your portfolio center.

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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.