Correlation Between Gemtek Technology and EZconn Corp

Can any of the company-specific risk be diversified away by investing in both Gemtek Technology and EZconn Corp 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 EZconn Corp 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 EZconn Corp, you can compare the effects of market volatilities on Gemtek Technology and EZconn Corp 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 EZconn Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gemtek Technology and EZconn Corp.

Diversification Opportunities for Gemtek Technology and EZconn Corp

-0.85

Correlation Coefficient

Gemtek Technology  EZconn Corp

Pay attention - limited upside

The 3 months correlation between Gemtek and EZconn is -0.85. Overlapping area represents the amount of risk that can be diversified away by holding Gemtek Technology Co and EZconn Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EZconn Corp 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 EZconn Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of EZconn Corp has no effect on the direction of Gemtek Technology i.e., Gemtek Technology and EZconn Corp go up and down completely randomly.

Pair Corralation between Gemtek Technology and EZconn Corp

Assuming the 90 days trading horizon Gemtek Technology Co is expected to under-perform the EZconn Corp. But the stock apears to be less risky and, when comparing its historical volatility, Gemtek Technology Co is 2.22 times less risky than EZconn Corp. The stock trades about -0.21 of its potential returns per unit of risk. The EZconn Corp is currently generating about 0.25 of returns per unit of risk over similar time horizon. If you would invest  34,800  in EZconn Corp on September 14, 2024 and sell it today you would earn a total of  27,900  from holding EZconn Corp or generate 80.17% return on investment over 90 days.

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

Gemtek Technology Co  vs.  EZconn Corp

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 abnormal performance in the last few months, the Stock's basic indicators remain fairly stable which may send shares a bit higher in January 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

EZconn Corp

Risk-Adjusted Performance

19 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in EZconn Corp are ranked lower than 19 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, EZconn Corp showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Gemtek Technology and EZconn Corp

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

The idea behind Gemtek Technology Co and EZconn Corp 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.