Correlation Between Automobile and Camus Engineering
Can any of the company-specific risk be diversified away by investing in both Automobile and Camus Engineering 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 Automobile and Camus Engineering into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Automobile Pc and Camus Engineering Construction, you can compare the effects of market volatilities on Automobile and Camus Engineering 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 Automobile with a short position of Camus Engineering. Check out your portfolio center. Please also check ongoing floating volatility patterns of Automobile and Camus Engineering.
Diversification Opportunities for Automobile and Camus Engineering
-0.28 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Automobile and Camus is -0.28. Overlapping area represents the amount of risk that can be diversified away by holding Automobile Pc and Camus Engineering Construction in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Camus Engineering and Automobile 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 Automobile Pc are associated (or correlated) with Camus Engineering. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Camus Engineering has no effect on the direction of Automobile i.e., Automobile and Camus Engineering go up and down completely randomly.
Pair Corralation between Automobile and Camus Engineering
Assuming the 90 days trading horizon Automobile Pc is expected to under-perform the Camus Engineering. But the stock apears to be less risky and, when comparing its historical volatility, Automobile Pc is 3.31 times less risky than Camus Engineering. The stock trades about -0.3 of its potential returns per unit of risk. The Camus Engineering Construction is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 130,800 in Camus Engineering Construction on November 5, 2024 and sell it today you would lose (4,700) from holding Camus Engineering Construction or give up 3.59% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Automobile Pc vs. Camus Engineering Construction
Performance |
| Timeline |
| Automobile Pc |
| Camus Engineering |
Automobile and Camus Engineering Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Automobile and Camus Engineering
The main advantage of trading using opposite Automobile and Camus Engineering positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Automobile position performs unexpectedly, Camus Engineering 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 Camus Engineering will offset losses from the drop in Camus Engineering's long position.| Automobile vs. Mobileleader CoLtd | Automobile vs. Innowireless Co | Automobile vs. Lotte Data Communication | Automobile vs. Polaris Office Corp |
| Camus Engineering vs. Sangsin Energy Display | Camus Engineering vs. Iljin Display | Camus Engineering vs. YeaRimDang Publishing Co | Camus Engineering vs. Nable Communications |
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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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