Correlation Between Advanced Technology and Road Environment
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By analyzing existing cross correlation between Advanced Technology Materials and Road Environment Technology, you can compare the effects of market volatilities on Advanced Technology and Road Environment 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 Advanced Technology with a short position of Road Environment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Advanced Technology and Road Environment.
Diversification Opportunities for Advanced Technology and Road Environment
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Advanced and Road is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Advanced Technology Materials and Road Environment Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Road Environment Tec and Advanced Technology 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 Advanced Technology Materials are associated (or correlated) with Road Environment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Road Environment Tec has no effect on the direction of Advanced Technology i.e., Advanced Technology and Road Environment go up and down completely randomly.
Pair Corralation between Advanced Technology and Road Environment
Assuming the 90 days trading horizon Advanced Technology Materials is expected to generate 1.46 times more return on investment than Road Environment. However, Advanced Technology is 1.46 times more volatile than Road Environment Technology. It trades about 0.19 of its potential returns per unit of risk. Road Environment Technology is currently generating about -0.07 per unit of risk. If you would invest 1,029 in Advanced Technology Materials on August 29, 2024 and sell it today you would earn a total of 185.00 from holding Advanced Technology Materials or generate 17.98% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Advanced Technology Materials vs. Road Environment Technology
Performance |
| Timeline |
| Advanced Technology |
| Road Environment Tec |
Advanced Technology and Road Environment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Advanced Technology and Road Environment
The main advantage of trading using opposite Advanced Technology and Road Environment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Advanced Technology position performs unexpectedly, Road Environment 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 Road Environment will offset losses from the drop in Road Environment's long position.| Advanced Technology vs. Zijin Mining Group | Advanced Technology vs. Wanhua Chemical Group | Advanced Technology vs. Baoshan Iron Steel | Advanced Technology vs. Shandong Gold Mining |
| Road Environment vs. Will Semiconductor Co | Road Environment vs. Cicc Fund Management | Road Environment vs. Shenzhen Glory Medical | Road Environment vs. JCHX Mining Management |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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