Correlation Between Baotek Industrial and Gloria Material

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

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

Diversification Opportunities for Baotek Industrial and Gloria Material

0.29

Correlation Coefficient

Baotek Industrial  Gloria Material

Modest diversification

The 3 months correlation between Baotek and Gloria is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding Baotek Industrial Materials and Gloria Material Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gloria Material Tech and Baotek Industrial 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 Baotek Industrial Materials are associated (or correlated) with Gloria Material. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gloria Material Tech has no effect on the direction of Baotek Industrial i.e., Baotek Industrial and Gloria Material go up and down completely randomly.

Pair Corralation between Baotek Industrial and Gloria Material

Assuming the 90 days trading horizon Baotek Industrial Materials is expected to under-perform the Gloria Material. In addition to that, Baotek Industrial is 1.82 times more volatile than Gloria Material Technology. It trades about -0.09 of its total potential returns per unit of risk. Gloria Material Technology is currently generating about 0.06 per unit of volatility. If you would invest  4,610  in Gloria Material Technology on October 24, 2024 and sell it today you would earn a total of  225.00  from holding Gloria Material Technology or generate 4.88% return on investment over 90 days.

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

Baotek Industrial Materials  vs.  Gloria Material Technology

Baotek Industrial

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Baotek Industrial Materials 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 February 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

Gloria Material Tech

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Gloria Material Technology are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of fairly stable basic indicators, Gloria Material 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 Baotek Industrial and Gloria Material

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

The idea behind Baotek Industrial Materials and Gloria Material Technology 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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.