Correlation Between Gentex and Gamer Pakistan

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

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

Diversification Opportunities for Gentex and Gamer Pakistan

-0.38

Correlation Coefficient

Gentex  Gamer Pakistan

Very good diversification

The 3 months correlation between Gentex and Gamer is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding Gentex and Gamer Pakistan Common in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gamer Pakistan Common and Gentex 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 Gentex are associated (or correlated) with Gamer Pakistan. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gamer Pakistan Common has no effect on the direction of Gentex i.e., Gentex and Gamer Pakistan go up and down completely randomly.

Pair Corralation between Gentex and Gamer Pakistan

If you would invest  2,961  in Gentex on September 17, 2024 and sell it today you would earn a total of  98.00  from holding Gentex or generate 3.31% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	5.0%
Values	Daily Returns

Gentex  vs.  Gamer Pakistan Common

Gentex

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Gentex are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of fairly strong basic indicators, Gentex is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Gamer Pakistan Common

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Gamer Pakistan Common has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent basic indicators, Gamer Pakistan is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

Pair Trading with Gentex and Gamer Pakistan

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

The idea behind Gentex and Gamer Pakistan Common 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.