Correlation Between A Tech and SS TECH
Can any of the company-specific risk be diversified away by investing in both A Tech and SS TECH 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 A Tech and SS TECH into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between A Tech Solution Co and SS TECH, you can compare the effects of market volatilities on A Tech and SS TECH 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 A Tech with a short position of SS TECH. Check out your portfolio center. Please also check ongoing floating volatility patterns of A Tech and SS TECH.
Diversification Opportunities for A Tech and SS TECH
Almost no diversification
The 3 months correlation between 071670 and 101490 is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding A Tech Solution Co and SS TECH in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SS TECH and A Tech 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 A Tech Solution Co are associated (or correlated) with SS TECH. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SS TECH has no effect on the direction of A Tech i.e., A Tech and SS TECH go up and down completely randomly.
Pair Corralation between A Tech and SS TECH
Assuming the 90 days trading horizon A Tech Solution Co is expected to under-perform the SS TECH. But the stock apears to be less risky and, when comparing its historical volatility, A Tech Solution Co is 1.26 times less risky than SS TECH. The stock trades about -0.07 of its potential returns per unit of risk. The SS TECH is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 2,255,000 in SS TECH on August 25, 2024 and sell it today you would earn a total of 45,000 from holding SS TECH or generate 2.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
A Tech Solution Co vs. SS TECH
Performance |
| Timeline |
| A Tech Solution |
| SS TECH |
A Tech and SS TECH Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with A Tech and SS TECH
The main advantage of trading using opposite A Tech and SS TECH positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if A Tech position performs unexpectedly, SS TECH 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 SS TECH will offset losses from the drop in SS TECH's long position.| A Tech vs. Samsung Electronics Co | A Tech vs. Samsung Electronics Co | A Tech vs. Hyundai Motor Co | A Tech vs. Hyundai Motor |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
Other Complementary Tools
| Insider Screener Find insiders across different sectors to evaluate their impact on performance | |
| Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. | |
| Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity | |
| Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio | |
| CEOs Directory Screen CEOs from public companies around the world |