Correlation Between Rapac Communication and Gamatronic Electronic

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

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

Diversification Opportunities for Rapac Communication and Gamatronic Electronic

-0.25

Correlation Coefficient

Rapac Communication  Gamatronic Electronic

Very good diversification

The 3 months correlation between Rapac and Gamatronic is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding Rapac Communication Infrastruc and Gamatronic Electronic Industri in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gamatronic Electronic and Rapac Communication 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 Rapac Communication Infrastructure 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 Rapac Communication i.e., Rapac Communication and Gamatronic Electronic go up and down completely randomly.

Pair Corralation between Rapac Communication and Gamatronic Electronic

Assuming the 90 days trading horizon Rapac Communication Infrastructure is expected to generate 0.4 times more return on investment than Gamatronic Electronic. However, Rapac Communication Infrastructure is 2.5 times less risky than Gamatronic Electronic. It trades about 0.08 of its potential returns per unit of risk. Gamatronic Electronic Industries is currently generating about -0.07 per unit of risk. If you would invest  255,300  in Rapac Communication Infrastructure on September 4, 2024 and sell it today you would earn a total of  12,400  from holding Rapac Communication Infrastructure or generate 4.86% return on investment over 90 days.

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

Rapac Communication Infrastruc  vs.  Gamatronic Electronic Industri

Rapac Communication

Risk-Adjusted Performance

6 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Rapac Communication Infrastructure are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Rapac Communication may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Gamatronic Electronic

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Gamatronic Electronic Industries has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with Rapac Communication and Gamatronic Electronic

The main advantage of trading using opposite Rapac Communication and Gamatronic Electronic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Rapac Communication 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 Rapac Communication Infrastructure 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.