Correlation Between Acbel Polytech and Gemtek Technology

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

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

Diversification Opportunities for Acbel Polytech and Gemtek Technology

0.77

Correlation Coefficient

Acbel Polytech  Gemtek Technology

Poor diversification

The 3 months correlation between Acbel and Gemtek is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Acbel Polytech and Gemtek Technology Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gemtek Technology and Acbel Polytech 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 Acbel Polytech are associated (or correlated) with Gemtek Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gemtek Technology has no effect on the direction of Acbel Polytech i.e., Acbel Polytech and Gemtek Technology go up and down completely randomly.

Pair Corralation between Acbel Polytech and Gemtek Technology

Assuming the 90 days trading horizon Acbel Polytech is expected to under-perform the Gemtek Technology. But the stock apears to be less risky and, when comparing its historical volatility, Acbel Polytech is 1.36 times less risky than Gemtek Technology. The stock trades about -0.19 of its potential returns per unit of risk. The Gemtek Technology Co is currently generating about -0.13 of returns per unit of risk over similar time horizon. If you would invest  3,600  in Gemtek Technology Co on September 30, 2024 and sell it today you would lose (205.00) from holding Gemtek Technology Co or give up 5.69% of portfolio value over 90 days.

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

Acbel Polytech  vs.  Gemtek Technology Co

Acbel Polytech

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Acbel Polytech 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.

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.

Pair Trading with Acbel Polytech and Gemtek Technology

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

The idea behind Acbel Polytech and Gemtek Technology 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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.