Correlation Between Technicolor and Aptitude Software
Can any of the company-specific risk be diversified away by investing in both Technicolor and Aptitude Software 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 Technicolor and Aptitude Software into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Technicolor and Aptitude Software Group, you can compare the effects of market volatilities on Technicolor and Aptitude Software 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 Technicolor with a short position of Aptitude Software. Check out your portfolio center. Please also check ongoing floating volatility patterns of Technicolor and Aptitude Software.
Diversification Opportunities for Technicolor and Aptitude Software
0.52 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Technicolor and Aptitude is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding Technicolor and Aptitude Software Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aptitude Software and Technicolor 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 Technicolor are associated (or correlated) with Aptitude Software. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aptitude Software has no effect on the direction of Technicolor i.e., Technicolor and Aptitude Software go up and down completely randomly.
Pair Corralation between Technicolor and Aptitude Software
Assuming the 90 days trading horizon Technicolor is expected to generate 1.98 times more return on investment than Aptitude Software. However, Technicolor is 1.98 times more volatile than Aptitude Software Group. It trades about 0.04 of its potential returns per unit of risk. Aptitude Software Group is currently generating about -0.07 per unit of risk. If you would invest 11.00 in Technicolor on October 25, 2024 and sell it today you would earn a total of 1.00 from holding Technicolor or generate 9.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 99.2% |
| Values | Daily Returns |
Technicolor vs. Aptitude Software Group
Performance |
| Timeline |
| Technicolor |
| Aptitude Software |
Technicolor and Aptitude Software Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Technicolor and Aptitude Software
The main advantage of trading using opposite Technicolor and Aptitude Software positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Technicolor position performs unexpectedly, Aptitude Software 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 Aptitude Software will offset losses from the drop in Aptitude Software's long position.| Technicolor vs. Mobius Investment Trust | Technicolor vs. SoftBank Group Corp | Technicolor vs. Livermore Investments Group | Technicolor vs. Commerzbank AG |
| Aptitude Software vs. Cairo Communication SpA | Aptitude Software vs. Zoom Video Communications | Aptitude Software vs. MediaZest plc | Aptitude Software vs. Mobile Tornado Group |
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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