Correlation Between GemVaxKAEL CoLtd and ITM Semiconductor

Can any of the company-specific risk be diversified away by investing in both GemVaxKAEL CoLtd and ITM Semiconductor 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 ITM Semiconductor into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between GemVaxKAEL CoLtd and ITM Semiconductor Co, you can compare the effects of market volatilities on GemVaxKAEL CoLtd and ITM Semiconductor 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 ITM Semiconductor. Check out your portfolio center. Please also check ongoing floating volatility patterns of GemVaxKAEL CoLtd and ITM Semiconductor.

Diversification Opportunities for GemVaxKAEL CoLtd and ITM Semiconductor

-0.07

Correlation Coefficient

GemVaxKAEL CoLtd  ITM Semiconductor

Good diversification

The 3 months correlation between GemVaxKAEL and ITM is -0.07. Overlapping area represents the amount of risk that can be diversified away by holding GemVaxKAEL CoLtd and ITM Semiconductor Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ITM Semiconductor 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 ITM Semiconductor. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ITM Semiconductor has no effect on the direction of GemVaxKAEL CoLtd i.e., GemVaxKAEL CoLtd and ITM Semiconductor go up and down completely randomly.

Pair Corralation between GemVaxKAEL CoLtd and ITM Semiconductor

Assuming the 90 days trading horizon GemVaxKAEL CoLtd is expected to generate 3.6 times more return on investment than ITM Semiconductor. However, GemVaxKAEL CoLtd is 3.6 times more volatile than ITM Semiconductor Co. It trades about 0.03 of its potential returns per unit of risk. ITM Semiconductor Co is currently generating about -0.33 per unit of risk. If you would invest  1,941,000  in GemVaxKAEL CoLtd on September 4, 2024 and sell it today you would lose (71,000) from holding GemVaxKAEL CoLtd or give up 3.66% of portfolio value over 90 days.

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

GemVaxKAEL CoLtd  vs.  ITM Semiconductor Co

GemVaxKAEL CoLtd

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in GemVaxKAEL CoLtd are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, GemVaxKAEL CoLtd sustained solid returns over the last few months and may actually be approaching a breakup point.

ITM Semiconductor

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days ITM Semiconductor Co 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 GemVaxKAEL CoLtd and ITM Semiconductor

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

The idea behind GemVaxKAEL CoLtd and ITM Semiconductor 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..