Correlation Between Dimerco Data and Genesis Technology

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Can any of the company-specific risk be diversified away by investing in both Dimerco Data and Genesis 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 Dimerco Data and Genesis Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dimerco Data System and Genesis Technology, you can compare the effects of market volatilities on Dimerco Data and Genesis 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 Dimerco Data with a short position of Genesis Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dimerco Data and Genesis Technology.

Diversification Opportunities for Dimerco Data and Genesis Technology

0.8
  Correlation Coefficient

Very poor diversification

The 3 months correlation between Dimerco and Genesis is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Dimerco Data System and Genesis Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Genesis Technology and Dimerco Data 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 Dimerco Data System are associated (or correlated) with Genesis Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Genesis Technology has no effect on the direction of Dimerco Data i.e., Dimerco Data and Genesis Technology go up and down completely randomly.

Pair Corralation between Dimerco Data and Genesis Technology

Assuming the 90 days trading horizon Dimerco Data System is expected to generate 0.97 times more return on investment than Genesis Technology. However, Dimerco Data System is 1.03 times less risky than Genesis Technology. It trades about 0.09 of its potential returns per unit of risk. Genesis Technology is currently generating about 0.07 per unit of risk. If you would invest  6,085  in Dimerco Data System on July 13, 2024 and sell it today you would earn a total of  5,415  from holding Dimerco Data System or generate 88.99% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthStrong
Accuracy100.0%
ValuesDaily Returns

Dimerco Data System  vs.  Genesis Technology

 Performance 
       Timeline  
Dimerco Data System 

Risk-Adjusted Performance

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Weak
 
Strong
Very Weak
Over the last 90 days Dimerco Data System has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, Dimerco Data is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.
Genesis Technology 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Genesis Technology has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, Genesis Technology is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Dimerco Data and Genesis Technology Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Dimerco Data and Genesis Technology

The main advantage of trading using opposite Dimerco Data and Genesis Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dimerco Data position performs unexpectedly, Genesis 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 Genesis Technology will offset losses from the drop in Genesis Technology's long position.
The idea behind Dimerco Data System and Genesis Technology 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.

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