Correlation Between Aminologics CoLtd and Atinum Investment
Can any of the company-specific risk be diversified away by investing in both Aminologics CoLtd and Atinum Investment 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 Aminologics CoLtd and Atinum Investment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aminologics CoLtd and Atinum Investment Co, you can compare the effects of market volatilities on Aminologics CoLtd and Atinum Investment 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 Aminologics CoLtd with a short position of Atinum Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aminologics CoLtd and Atinum Investment.
Diversification Opportunities for Aminologics CoLtd and Atinum Investment
0.2 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Aminologics and Atinum is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding Aminologics CoLtd and Atinum Investment Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Atinum Investment and Aminologics CoLtd 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 Aminologics CoLtd are associated (or correlated) with Atinum Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Atinum Investment has no effect on the direction of Aminologics CoLtd i.e., Aminologics CoLtd and Atinum Investment go up and down completely randomly.
Pair Corralation between Aminologics CoLtd and Atinum Investment
Assuming the 90 days trading horizon Aminologics CoLtd is expected to under-perform the Atinum Investment. But the stock apears to be less risky and, when comparing its historical volatility, Aminologics CoLtd is 1.16 times less risky than Atinum Investment. The stock trades about -0.16 of its potential returns per unit of risk. The Atinum Investment Co is currently generating about -0.02 of returns per unit of risk over similar time horizon. If you would invest 246,000 in Atinum Investment Co on September 3, 2024 and sell it today you would lose (10,500) from holding Atinum Investment Co or give up 4.27% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aminologics CoLtd vs. Atinum Investment Co
Performance |
| Timeline |
| Aminologics CoLtd |
| Atinum Investment |
Aminologics CoLtd and Atinum Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aminologics CoLtd and Atinum Investment
The main advantage of trading using opposite Aminologics CoLtd and Atinum Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aminologics CoLtd position performs unexpectedly, Atinum Investment 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 Atinum Investment will offset losses from the drop in Atinum Investment's long position.The idea behind Aminologics CoLtd and Atinum Investment Co 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.
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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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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