Correlation Between Gemtek Technology and Ichia Technologies

Can any of the company-specific risk be diversified away by investing in both Gemtek Technology and Ichia Technologies 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 Ichia Technologies 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 Ichia Technologies, you can compare the effects of market volatilities on Gemtek Technology and Ichia Technologies 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 Ichia Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gemtek Technology and Ichia Technologies.

Diversification Opportunities for Gemtek Technology and Ichia Technologies

0.41

Correlation Coefficient

Gemtek Technology  Ichia Technologies

Very weak diversification

The 3 months correlation between Gemtek and Ichia is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding Gemtek Technology Co and Ichia Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ichia Technologies 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 Ichia Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ichia Technologies has no effect on the direction of Gemtek Technology i.e., Gemtek Technology and Ichia Technologies go up and down completely randomly.

Pair Corralation between Gemtek Technology and Ichia Technologies

Assuming the 90 days trading horizon Gemtek Technology is expected to generate 1.94 times less return on investment than Ichia Technologies. But when comparing it to its historical volatility, Gemtek Technology Co is 1.05 times less risky than Ichia Technologies. It trades about 0.04 of its potential returns per unit of risk. Ichia Technologies is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest  4,030  in Ichia Technologies on September 1, 2024 and sell it today you would earn a total of  110.00  from holding Ichia Technologies or generate 2.73% return on investment over 90 days.

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

Gemtek Technology Co  vs.  Ichia Technologies

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 abnormal performance in the last few months, the Stock's basic indicators remain fairly stable which may send shares a bit higher in December 2024. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

Ichia Technologies

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Ichia Technologies has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, Ichia Technologies 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 Ichia Technologies

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

The idea behind Gemtek Technology Co and Ichia Technologies 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 Equity Valuation module to check real value of public entities based on technical and fundamental data.