Correlation Between Getabec Public and Masterkool International

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

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

Diversification Opportunities for Getabec Public and Masterkool International

0.71

Correlation Coefficient

Getabec Public  Masterkool International

Poor diversification

The 3 months correlation between Getabec and Masterkool is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Getabec Public and Masterkool International Publi in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Masterkool International and Getabec Public 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 Getabec Public are associated (or correlated) with Masterkool International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Masterkool International has no effect on the direction of Getabec Public i.e., Getabec Public and Masterkool International go up and down completely randomly.

Pair Corralation between Getabec Public and Masterkool International

Assuming the 90 days trading horizon Getabec Public is expected to generate 0.46 times more return on investment than Masterkool International. However, Getabec Public is 2.17 times less risky than Masterkool International. It trades about 0.0 of its potential returns per unit of risk. Masterkool International Public is currently generating about -0.07 per unit of risk. If you would invest  73.00  in Getabec Public on September 14, 2024 and sell it today you would lose (1.00) from holding Getabec Public or give up 1.37% of portfolio value over 90 days.

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

Getabec Public  vs.  Masterkool International Publi

Getabec Public

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Getabec Public has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent fundamental drivers, Getabec Public is not utilizing all of its potentials. The current stock price mess, may contribute to short-term losses for the institutional investors.

Masterkool International

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Masterkool International Public has generated negative risk-adjusted returns adding no value to investors with long positions. Despite conflicting performance in the last few months, the Stock's forward-looking signals remain quite persistent which may send shares a bit higher in January 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Pair Trading with Getabec Public and Masterkool International

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

The idea behind Getabec Public and Masterkool International Public 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.

Check out your portfolio center.

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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.