Correlation Between Mobile Appliance and Automobile
Can any of the company-specific risk be diversified away by investing in both Mobile Appliance and Automobile 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 Mobile Appliance and Automobile into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mobile Appliance and Automobile Pc, you can compare the effects of market volatilities on Mobile Appliance and Automobile 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 Mobile Appliance with a short position of Automobile. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mobile Appliance and Automobile.
Diversification Opportunities for Mobile Appliance and Automobile
0.07 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Mobile and Automobile is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding Mobile Appliance and Automobile Pc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Automobile Pc and Mobile Appliance 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 Mobile Appliance are associated (or correlated) with Automobile. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Automobile Pc has no effect on the direction of Mobile Appliance i.e., Mobile Appliance and Automobile go up and down completely randomly.
Pair Corralation between Mobile Appliance and Automobile
Assuming the 90 days trading horizon Mobile Appliance is expected to generate 1.11 times more return on investment than Automobile. However, Mobile Appliance is 1.11 times more volatile than Automobile Pc. It trades about 0.03 of its potential returns per unit of risk. Automobile Pc is currently generating about -0.18 per unit of risk. If you would invest 224,000 in Mobile Appliance on October 25, 2024 and sell it today you would earn a total of 4,000 from holding Mobile Appliance or generate 1.79% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mobile Appliance vs. Automobile Pc
Performance |
| Timeline |
| Mobile Appliance |
| Automobile Pc |
Mobile Appliance and Automobile Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mobile Appliance and Automobile
The main advantage of trading using opposite Mobile Appliance and Automobile positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mobile Appliance position performs unexpectedly, Automobile 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 Automobile will offset losses from the drop in Automobile's long position.| Mobile Appliance vs. Sungdo Engineering Construction | Mobile Appliance vs. Korean Drug Co | Mobile Appliance vs. Mirai Semiconductors Co | Mobile Appliance vs. BGF Retail Co |
| Automobile vs. Sajo Seafood | Automobile vs. Duksan Hi Metal | Automobile vs. DONGKUK TED METAL | Automobile vs. FOODWELL 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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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