Correlation Between YH Dimri and Gamatronic Electronic

Can any of the company-specific risk be diversified away by investing in both YH Dimri and Gamatronic Electronic 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 YH Dimri and Gamatronic Electronic into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between YH Dimri Construction and Gamatronic Electronic Industries, you can compare the effects of market volatilities on YH Dimri and Gamatronic Electronic 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 YH Dimri with a short position of Gamatronic Electronic. Check out your portfolio center. Please also check ongoing floating volatility patterns of YH Dimri and Gamatronic Electronic.

Diversification Opportunities for YH Dimri and Gamatronic Electronic

0.41

Correlation Coefficient

YH Dimri  Gamatronic Electronic

Very weak diversification

The 3 months correlation between DIMRI and Gamatronic is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding YH Dimri Construction and Gamatronic Electronic Industri in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gamatronic Electronic and YH Dimri 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 YH Dimri Construction are associated (or correlated) with Gamatronic Electronic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gamatronic Electronic has no effect on the direction of YH Dimri i.e., YH Dimri and Gamatronic Electronic go up and down completely randomly.

Pair Corralation between YH Dimri and Gamatronic Electronic

Assuming the 90 days trading horizon YH Dimri Construction is expected to under-perform the Gamatronic Electronic. But the stock apears to be less risky and, when comparing its historical volatility, YH Dimri Construction is 4.39 times less risky than Gamatronic Electronic. The stock trades about -0.06 of its potential returns per unit of risk. The Gamatronic Electronic Industries is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest  91,740  in Gamatronic Electronic Industries on December 2, 2024 and sell it today you would earn a total of  27,260  from holding Gamatronic Electronic Industries or generate 29.71% return on investment over 90 days.

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

YH Dimri Construction  vs.  Gamatronic Electronic Industri

YH Dimri Construction

Risk-Adjusted Performance

Very Weak

Over the last 90 days YH Dimri Construction has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, YH Dimri is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Gamatronic Electronic

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Gamatronic Electronic Industries are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Gamatronic Electronic sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with YH Dimri and Gamatronic Electronic

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

The idea behind YH Dimri Construction and Gamatronic Electronic Industries 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.