Correlation Between GemVaxKAEL CoLtd and Bohae Brewery
Can any of the company-specific risk be diversified away by investing in both GemVaxKAEL CoLtd and Bohae Brewery 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 GemVaxKAEL CoLtd and Bohae Brewery into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GemVaxKAEL CoLtd and Bohae Brewery, you can compare the effects of market volatilities on GemVaxKAEL CoLtd and Bohae Brewery 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 GemVaxKAEL CoLtd with a short position of Bohae Brewery. Check out your portfolio center. Please also check ongoing floating volatility patterns of GemVaxKAEL CoLtd and Bohae Brewery.
Diversification Opportunities for GemVaxKAEL CoLtd and Bohae Brewery
-0.05 | Correlation Coefficient |
Good diversification
The 3 months correlation between GemVaxKAEL and Bohae is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding GemVaxKAEL CoLtd and Bohae Brewery in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bohae Brewery and GemVaxKAEL CoLtd 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 GemVaxKAEL CoLtd are associated (or correlated) with Bohae Brewery. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bohae Brewery has no effect on the direction of GemVaxKAEL CoLtd i.e., GemVaxKAEL CoLtd and Bohae Brewery go up and down completely randomly.
Pair Corralation between GemVaxKAEL CoLtd and Bohae Brewery
Assuming the 90 days trading horizon GemVaxKAEL CoLtd is expected to generate 0.89 times more return on investment than Bohae Brewery. However, GemVaxKAEL CoLtd is 1.13 times less risky than Bohae Brewery. It trades about 0.14 of its potential returns per unit of risk. Bohae Brewery is currently generating about 0.07 per unit of risk. If you would invest 1,365,000 in GemVaxKAEL CoLtd on August 30, 2024 and sell it today you would earn a total of 253,000 from holding GemVaxKAEL CoLtd or generate 18.53% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
GemVaxKAEL CoLtd vs. Bohae Brewery
Performance |
Timeline |
GemVaxKAEL CoLtd |
Bohae Brewery |
GemVaxKAEL CoLtd and Bohae Brewery Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with GemVaxKAEL CoLtd and Bohae Brewery
The main advantage of trading using opposite GemVaxKAEL CoLtd and Bohae Brewery positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GemVaxKAEL CoLtd position performs unexpectedly, Bohae Brewery 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 Bohae Brewery will offset losses from the drop in Bohae Brewery's long position.GemVaxKAEL CoLtd vs. Bohae Brewery | GemVaxKAEL CoLtd vs. SS TECH | GemVaxKAEL CoLtd vs. Eagle Veterinary Technology | GemVaxKAEL CoLtd vs. Lion Chemtech Co |
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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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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