Correlation Between Cloud Air and Amogreentech CoLtd
Can any of the company-specific risk be diversified away by investing in both Cloud Air and Amogreentech CoLtd 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 Cloud Air and Amogreentech CoLtd into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cloud Air CoLtd and Amogreentech CoLtd, you can compare the effects of market volatilities on Cloud Air and Amogreentech CoLtd 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 Cloud Air with a short position of Amogreentech CoLtd. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cloud Air and Amogreentech CoLtd.
Diversification Opportunities for Cloud Air and Amogreentech CoLtd
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Cloud and Amogreentech is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Cloud Air CoLtd and Amogreentech CoLtd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amogreentech CoLtd and Cloud Air 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 Cloud Air CoLtd are associated (or correlated) with Amogreentech CoLtd. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Amogreentech CoLtd has no effect on the direction of Cloud Air i.e., Cloud Air and Amogreentech CoLtd go up and down completely randomly.
Pair Corralation between Cloud Air and Amogreentech CoLtd
Assuming the 90 days trading horizon Cloud Air CoLtd is expected to generate 0.54 times more return on investment than Amogreentech CoLtd. However, Cloud Air CoLtd is 1.84 times less risky than Amogreentech CoLtd. It trades about 0.13 of its potential returns per unit of risk. Amogreentech CoLtd is currently generating about -0.08 per unit of risk. If you would invest 84,000 in Cloud Air CoLtd on September 18, 2024 and sell it today you would earn a total of 5,100 from holding Cloud Air CoLtd or generate 6.07% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cloud Air CoLtd vs. Amogreentech CoLtd
Performance |
| Timeline |
| Cloud Air CoLtd |
| Amogreentech CoLtd |
Cloud Air and Amogreentech CoLtd Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cloud Air and Amogreentech CoLtd
The main advantage of trading using opposite Cloud Air and Amogreentech CoLtd positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cloud Air position performs unexpectedly, Amogreentech CoLtd 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 Amogreentech CoLtd will offset losses from the drop in Amogreentech CoLtd's long position.| Cloud Air vs. SK Hynix | Cloud Air vs. People Technology | Cloud Air vs. Hana Materials | Cloud Air vs. SIMMTECH Co |
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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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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