Correlation Between Atinum Investment and DAEDUCK ELECTRONICS
Can any of the company-specific risk be diversified away by investing in both Atinum Investment and DAEDUCK ELECTRONICS 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 Atinum Investment and DAEDUCK ELECTRONICS into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Atinum Investment Co and DAEDUCK ELECTRONICS CoLtd, you can compare the effects of market volatilities on Atinum Investment and DAEDUCK ELECTRONICS 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 Atinum Investment with a short position of DAEDUCK ELECTRONICS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Atinum Investment and DAEDUCK ELECTRONICS.
Diversification Opportunities for Atinum Investment and DAEDUCK ELECTRONICS
-0.2 | Correlation Coefficient |
Good diversification
The 3 months correlation between Atinum and DAEDUCK is -0.2. Overlapping area represents the amount of risk that can be diversified away by holding Atinum Investment Co and DAEDUCK ELECTRONICS CoLtd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DAEDUCK ELECTRONICS CoLtd and Atinum Investment 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 Atinum Investment Co are associated (or correlated) with DAEDUCK ELECTRONICS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DAEDUCK ELECTRONICS CoLtd has no effect on the direction of Atinum Investment i.e., Atinum Investment and DAEDUCK ELECTRONICS go up and down completely randomly.
Pair Corralation between Atinum Investment and DAEDUCK ELECTRONICS
Assuming the 90 days trading horizon Atinum Investment Co is expected to under-perform the DAEDUCK ELECTRONICS. In addition to that, Atinum Investment is 1.73 times more volatile than DAEDUCK ELECTRONICS CoLtd. It trades about -0.13 of its total potential returns per unit of risk. DAEDUCK ELECTRONICS CoLtd is currently generating about 0.04 per unit of volatility. If you would invest 805,000 in DAEDUCK ELECTRONICS CoLtd on September 1, 2024 and sell it today you would earn a total of 10,000 from holding DAEDUCK ELECTRONICS CoLtd or generate 1.24% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Atinum Investment Co vs. DAEDUCK ELECTRONICS CoLtd
Performance |
| Timeline |
| Atinum Investment |
| DAEDUCK ELECTRONICS CoLtd |
Atinum Investment and DAEDUCK ELECTRONICS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Atinum Investment and DAEDUCK ELECTRONICS
The main advantage of trading using opposite Atinum Investment and DAEDUCK ELECTRONICS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Atinum Investment position performs unexpectedly, DAEDUCK ELECTRONICS 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 DAEDUCK ELECTRONICS will offset losses from the drop in DAEDUCK ELECTRONICS's long position.The idea behind Atinum Investment Co and DAEDUCK ELECTRONICS CoLtd 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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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