Correlation Between Gemtek Technology and Da Cin

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

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

Diversification Opportunities for Gemtek Technology and Da Cin

-0.66

Correlation Coefficient

Gemtek Technology  Da Cin

Excellent diversification

The 3 months correlation between Gemtek and 2535 is -0.66. Overlapping area represents the amount of risk that can be diversified away by holding Gemtek Technology Co and Da Cin Construction Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Da Cin Construction and Gemtek Technology 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 Gemtek Technology Co are associated (or correlated) with Da Cin. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Da Cin Construction has no effect on the direction of Gemtek Technology i.e., Gemtek Technology and Da Cin go up and down completely randomly.

Pair Corralation between Gemtek Technology and Da Cin

Assuming the 90 days trading horizon Gemtek Technology Co is expected to under-perform the Da Cin. In addition to that, Gemtek Technology is 2.68 times more volatile than Da Cin Construction Co. It trades about -0.16 of its total potential returns per unit of risk. Da Cin Construction Co is currently generating about -0.13 per unit of volatility. If you would invest  5,470  in Da Cin Construction Co on October 8, 2024 and sell it today you would lose (100.00) from holding Da Cin Construction Co or give up 1.83% of portfolio value over 90 days.

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

Gemtek Technology Co  vs.  Da Cin Construction Co

Gemtek Technology

Risk-Adjusted Performance

0 of 100

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 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.

Da Cin Construction

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Da Cin Construction Co are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, Da Cin may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with Gemtek Technology and Da Cin

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

The idea behind Gemtek Technology Co and Da Cin Construction 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.