Correlation Between AeroSpace Technology and Sam A
Can any of the company-specific risk be diversified away by investing in both AeroSpace Technology and Sam A 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 AeroSpace Technology and Sam A into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AeroSpace Technology of and Sam A Pharm Co, you can compare the effects of market volatilities on AeroSpace Technology and Sam A 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 AeroSpace Technology with a short position of Sam A. Check out your portfolio center. Please also check ongoing floating volatility patterns of AeroSpace Technology and Sam A.
Diversification Opportunities for AeroSpace Technology and Sam A
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between AeroSpace and Sam is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding AeroSpace Technology of and Sam A Pharm Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sam A Pharm and AeroSpace 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 AeroSpace Technology of are associated (or correlated) with Sam A. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sam A Pharm has no effect on the direction of AeroSpace Technology i.e., AeroSpace Technology and Sam A go up and down completely randomly.
Pair Corralation between AeroSpace Technology and Sam A
Assuming the 90 days trading horizon AeroSpace Technology of is expected to generate 1.04 times more return on investment than Sam A. However, AeroSpace Technology is 1.04 times more volatile than Sam A Pharm Co. It trades about -0.14 of its potential returns per unit of risk. Sam A Pharm Co is currently generating about -0.61 per unit of risk. If you would invest 53,000 in AeroSpace Technology of on September 4, 2024 and sell it today you would lose (2,900) from holding AeroSpace Technology of or give up 5.47% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
AeroSpace Technology of vs. Sam A Pharm Co
Performance |
| Timeline |
| AeroSpace Technology |
| Sam A Pharm |
AeroSpace Technology and Sam A Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AeroSpace Technology and Sam A
The main advantage of trading using opposite AeroSpace Technology and Sam A positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AeroSpace Technology position performs unexpectedly, Sam A 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 Sam A will offset losses from the drop in Sam A's long position.| AeroSpace Technology vs. LG Display | AeroSpace Technology vs. Hyundai Motor | AeroSpace Technology vs. Hyundai Motor Co | AeroSpace Technology vs. Hyundai Motor 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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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