Correlation Between Greatech Technology and Computer Forms

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Can any of the company-specific risk be diversified away by investing in both Greatech Technology and Computer Forms 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 Greatech Technology and Computer Forms into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Greatech Technology Bhd and Computer Forms Bhd, you can compare the effects of market volatilities on Greatech Technology and Computer Forms 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 Greatech Technology with a short position of Computer Forms. Check out your portfolio center. Please also check ongoing floating volatility patterns of Greatech Technology and Computer Forms.

Diversification Opportunities for Greatech Technology and Computer Forms

-0.4
  Correlation Coefficient

Very good diversification

The 3 months correlation between Greatech and Computer is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding Greatech Technology Bhd and Computer Forms Bhd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Computer Forms Bhd and Greatech 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 Greatech Technology Bhd are associated (or correlated) with Computer Forms. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Computer Forms Bhd has no effect on the direction of Greatech Technology i.e., Greatech Technology and Computer Forms go up and down completely randomly.

Pair Corralation between Greatech Technology and Computer Forms

Assuming the 90 days trading horizon Greatech Technology Bhd is expected to generate 0.35 times more return on investment than Computer Forms. However, Greatech Technology Bhd is 2.85 times less risky than Computer Forms. It trades about 0.0 of its potential returns per unit of risk. Computer Forms Bhd is currently generating about -0.09 per unit of risk. If you would invest  239.00  in Greatech Technology Bhd on September 26, 2024 and sell it today you would lose (11.00) from holding Greatech Technology Bhd or give up 4.6% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthVery Weak
Accuracy100.0%
ValuesDaily Returns

Greatech Technology Bhd  vs.  Computer Forms Bhd

 Performance 
       Timeline  
Greatech Technology Bhd 

Risk-Adjusted Performance

5 of 100

 
Weak
 
Strong
Modest
Compared to the overall equity markets, risk-adjusted returns on investments in Greatech Technology Bhd are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting basic indicators, Greatech Technology may actually be approaching a critical reversion point that can send shares even higher in January 2025.
Computer Forms Bhd 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Computer Forms Bhd has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent basic indicators, Computer Forms is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

Greatech Technology and Computer Forms Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Greatech Technology and Computer Forms

The main advantage of trading using opposite Greatech Technology and Computer Forms positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Greatech Technology position performs unexpectedly, Computer Forms 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 Computer Forms will offset losses from the drop in Computer Forms' long position.
The idea behind Greatech Technology Bhd and Computer Forms Bhd 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.

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