Correlation Between Green World and Gemtek Technology

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

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

Diversification Opportunities for Green World and Gemtek Technology

-0.47

Correlation Coefficient

Green World  Gemtek Technology

Very good diversification

The 3 months correlation between Green and Gemtek is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding Green World Fintech and Gemtek Technology Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gemtek Technology and Green World 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 Green World Fintech are associated (or correlated) with Gemtek Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gemtek Technology has no effect on the direction of Green World i.e., Green World and Gemtek Technology go up and down completely randomly.

Pair Corralation between Green World and Gemtek Technology

Assuming the 90 days trading horizon Green World Fintech is expected to under-perform the Gemtek Technology. In addition to that, Green World is 1.18 times more volatile than Gemtek Technology Co. It trades about -0.15 of its total potential returns per unit of risk. Gemtek Technology Co is currently generating about -0.17 per unit of volatility. If you would invest  3,650  in Gemtek Technology Co on September 25, 2024 and sell it today you would lose (280.00) from holding Gemtek Technology Co or give up 7.67% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	95.45%
Values	Daily Returns

Green World Fintech  vs.  Gemtek Technology Co

Green World Fintech

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Green World Fintech are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak basic indicators, Green World showed solid returns over the last few months and may actually be approaching a breakup point.

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.

Pair Trading with Green World and Gemtek Technology

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

The idea behind Green World Fintech and Gemtek 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.

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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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.