Correlation Between 20 Microns and G Tec

Can any of the company-specific risk be diversified away by investing in both 20 Microns and G Tec 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 20 Microns and G Tec into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between 20 Microns Limited and G Tec Jainx Education, you can compare the effects of market volatilities on 20 Microns and G Tec 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 20 Microns with a short position of G Tec. Check out your portfolio center. Please also check ongoing floating volatility patterns of 20 Microns and G Tec.

Diversification Opportunities for 20 Microns and G Tec

0.78

Correlation Coefficient

20 Microns  G Tec

Poor diversification

The 3 months correlation between 20MICRONS and GTECJAINX is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding 20 Microns Limited and G Tec Jainx Education in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on G Tec Jainx and 20 Microns 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 20 Microns Limited are associated (or correlated) with G Tec. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of G Tec Jainx has no effect on the direction of 20 Microns i.e., 20 Microns and G Tec go up and down completely randomly.

Pair Corralation between 20 Microns and G Tec

Assuming the 90 days trading horizon 20 Microns Limited is expected to generate 0.85 times more return on investment than G Tec. However, 20 Microns Limited is 1.17 times less risky than G Tec. It trades about 0.05 of its potential returns per unit of risk. G Tec Jainx Education is currently generating about -0.1 per unit of risk. If you would invest  24,260  in 20 Microns Limited on September 12, 2024 and sell it today you would earn a total of  494.00  from holding 20 Microns Limited or generate 2.04% return on investment over 90 days.

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

20 Microns Limited  vs.  G Tec Jainx Education

20 Microns Limited

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days 20 Microns Limited has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of inconsistent performance in the last few months, the Stock's basic indicators remain very healthy which may send shares a bit higher in January 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

G Tec Jainx

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days G Tec Jainx Education has generated negative risk-adjusted returns adding no value to investors with long positions. Despite uncertain performance in the last few months, the Stock's forward indicators remain fairly strong which may send shares a bit higher in January 2025. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.

Pair Trading with 20 Microns and G Tec

The main advantage of trading using opposite 20 Microns and G Tec positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if 20 Microns position performs unexpectedly, G Tec 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 G Tec will offset losses from the drop in G Tec's long position.

The idea behind 20 Microns Limited and G Tec Jainx Education 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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..