Correlation Between AeroSpace Technology and Digital Imaging
Can any of the company-specific risk be diversified away by investing in both AeroSpace Technology and Digital Imaging 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 Digital Imaging 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 Digital Imaging Technology, you can compare the effects of market volatilities on AeroSpace Technology and Digital Imaging 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 Digital Imaging. Check out your portfolio center. Please also check ongoing floating volatility patterns of AeroSpace Technology and Digital Imaging.
Diversification Opportunities for AeroSpace Technology and Digital Imaging
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between AeroSpace and Digital is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding AeroSpace Technology of and Digital Imaging Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Digital Imaging Tech 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 Digital Imaging. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Digital Imaging Tech has no effect on the direction of AeroSpace Technology i.e., AeroSpace Technology and Digital Imaging go up and down completely randomly.
Pair Corralation between AeroSpace Technology and Digital Imaging
Assuming the 90 days trading horizon AeroSpace Technology of is expected to under-perform the Digital Imaging. In addition to that, AeroSpace Technology is 1.17 times more volatile than Digital Imaging Technology. It trades about -0.05 of its total potential returns per unit of risk. Digital Imaging Technology is currently generating about 0.06 per unit of volatility. If you would invest 516,813 in Digital Imaging Technology on September 14, 2024 and sell it today you would earn a total of 658,187 from holding Digital Imaging Technology or generate 127.35% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 97.51% |
| Values | Daily Returns |
AeroSpace Technology of vs. Digital Imaging Technology
Performance |
| Timeline |
| AeroSpace Technology |
| Digital Imaging Tech |
AeroSpace Technology and Digital Imaging Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AeroSpace Technology and Digital Imaging
The main advantage of trading using opposite AeroSpace Technology and Digital Imaging positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AeroSpace Technology position performs unexpectedly, Digital Imaging 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 Digital Imaging will offset losses from the drop in Digital Imaging's long position.| AeroSpace Technology vs. Korea New Network | AeroSpace Technology vs. Solution Advanced Technology | AeroSpace Technology vs. Busan Industrial Co | AeroSpace Technology vs. Busan Ind |
| Digital Imaging vs. SK Hynix | Digital Imaging vs. People Technology | Digital Imaging vs. Hana Materials | Digital Imaging vs. SIMMTECH Co |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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