Correlation Between G Bits and ROPEOK Technology

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

By analyzing existing cross correlation between G bits Network Technology and ROPEOK Technology Group, you can compare the effects of market volatilities on G Bits and ROPEOK Technology 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 G Bits with a short position of ROPEOK Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of G Bits and ROPEOK Technology.

Diversification Opportunities for G Bits and ROPEOK Technology

0.28

Correlation Coefficient

G Bits  ROPEOK Technology

Modest diversification

The 3 months correlation between 603444 and ROPEOK is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding G bits Network Technology and ROPEOK Technology Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ROPEOK Technology and G Bits 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 G bits Network Technology are associated (or correlated) with ROPEOK Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ROPEOK Technology has no effect on the direction of G Bits i.e., G Bits and ROPEOK Technology go up and down completely randomly.

Pair Corralation between G Bits and ROPEOK Technology

Assuming the 90 days trading horizon G bits Network Technology is expected to generate 0.72 times more return on investment than ROPEOK Technology. However, G bits Network Technology is 1.39 times less risky than ROPEOK Technology. It trades about 0.0 of its potential returns per unit of risk. ROPEOK Technology Group is currently generating about -0.02 per unit of risk. If you would invest  26,268  in G bits Network Technology on September 23, 2024 and sell it today you would lose (3,498) from holding G bits Network Technology or give up 13.32% of portfolio value over 90 days.

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

G bits Network Technology  vs.  ROPEOK Technology Group

G bits Network

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in G bits Network Technology are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, G Bits sustained solid returns over the last few months and may actually be approaching a breakup point.

ROPEOK Technology

Risk-Adjusted Performance

16 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in ROPEOK Technology Group are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, ROPEOK Technology sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with G Bits and ROPEOK Technology

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

The idea behind G bits Network Technology and ROPEOK Technology Group 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.