Correlation Between Gemtek Technology and Kinik

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

By analyzing existing cross correlation between Gemtek Technology Co and Kinik Co, you can compare the effects of market volatilities on Gemtek Technology and Kinik 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 Gemtek Technology with a short position of Kinik. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gemtek Technology and Kinik.

Diversification Opportunities for Gemtek Technology and Kinik

0.15

Correlation Coefficient

Gemtek Technology  Kinik

Average diversification

The 3 months correlation between Gemtek and Kinik is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding Gemtek Technology Co and Kinik Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kinik and Gemtek 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 Gemtek Technology Co are associated (or correlated) with Kinik. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kinik has no effect on the direction of Gemtek Technology i.e., Gemtek Technology and Kinik go up and down completely randomly.

Pair Corralation between Gemtek Technology and Kinik

Assuming the 90 days trading horizon Gemtek Technology Co is expected to under-perform the Kinik. But the stock apears to be less risky and, when comparing its historical volatility, Gemtek Technology Co is 1.48 times less risky than Kinik. The stock trades about -0.07 of its potential returns per unit of risk. The Kinik Co is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest  30,300  in Kinik Co on September 4, 2024 and sell it today you would lose (350.00) from holding Kinik Co or give up 1.16% of portfolio value over 90 days.

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

Gemtek Technology Co  vs.  Kinik Co

Gemtek Technology

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Gemtek Technology Co has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest abnormal performance, the Stock's basic indicators remain stable and the latest fuss on Wall Street may also be a sign of long-term gains for the venture sophisticated investors.

Kinik

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Kinik Co has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, Kinik is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pair Trading with Gemtek Technology and Kinik

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

The idea behind Gemtek Technology Co and Kinik 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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.