Correlation Between Gemtek Technology and U Media

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

Diversification Opportunities for Gemtek Technology and U Media

0.03

Correlation Coefficient

Gemtek Technology  U Media

Significant diversification

The 3 months correlation between Gemtek and 6470 is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding Gemtek Technology Co and U Media Communications in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on U Media Communications 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 U Media. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of U Media Communications has no effect on the direction of Gemtek Technology i.e., Gemtek Technology and U Media go up and down completely randomly.

Pair Corralation between Gemtek Technology and U Media

Assuming the 90 days trading horizon Gemtek Technology Co is expected to generate 0.99 times more return on investment than U Media. However, Gemtek Technology Co is 1.01 times less risky than U Media. It trades about 0.04 of its potential returns per unit of risk. U Media Communications is currently generating about 0.0 per unit of risk. If you would invest  2,820  in Gemtek Technology Co on September 4, 2024 and sell it today you would earn a total of  845.00  from holding Gemtek Technology Co or generate 29.96% return on investment over 90 days.

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

Gemtek Technology Co  vs.  U Media Communications

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.

U Media Communications

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in U Media Communications are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, U Media may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Gemtek Technology and U Media

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

The idea behind Gemtek Technology Co and U Media Communications 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.