Correlation Between ABOV Semiconductor and People Technology
Can any of the company-specific risk be diversified away by investing in both ABOV Semiconductor and People Technology 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 ABOV Semiconductor and People Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ABOV Semiconductor Co and People Technology, you can compare the effects of market volatilities on ABOV Semiconductor and People Technology 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 ABOV Semiconductor with a short position of People Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of ABOV Semiconductor and People Technology.
Diversification Opportunities for ABOV Semiconductor and People Technology
0.68 | Correlation Coefficient |
Poor diversification
The 3 months correlation between ABOV and People is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding ABOV Semiconductor Co and People Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on People Technology and ABOV Semiconductor 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 ABOV Semiconductor Co are associated (or correlated) with People Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of People Technology has no effect on the direction of ABOV Semiconductor i.e., ABOV Semiconductor and People Technology go up and down completely randomly.
Pair Corralation between ABOV Semiconductor and People Technology
Assuming the 90 days trading horizon ABOV Semiconductor Co is expected to generate 1.56 times more return on investment than People Technology. However, ABOV Semiconductor is 1.56 times more volatile than People Technology. It trades about 0.02 of its potential returns per unit of risk. People Technology is currently generating about 0.0 per unit of risk. If you would invest 881,093 in ABOV Semiconductor Co on August 26, 2024 and sell it today you would lose (62,093) from holding ABOV Semiconductor Co or give up 7.05% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
ABOV Semiconductor Co vs. People Technology
Performance |
| Timeline |
| ABOV Semiconductor |
| People Technology |
ABOV Semiconductor and People Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ABOV Semiconductor and People Technology
The main advantage of trading using opposite ABOV Semiconductor and People Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ABOV Semiconductor position performs unexpectedly, People Technology 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 People Technology will offset losses from the drop in People Technology's long position.| ABOV Semiconductor vs. Korea Real Estate | ABOV Semiconductor vs. Korea Ratings Co | ABOV Semiconductor vs. IQuest Co | ABOV Semiconductor vs. Wonbang Tech Co |
| People Technology vs. Golden Bridge Investment | People Technology vs. Dong A Steel Technology | People Technology vs. Global Standard Technology | People Technology vs. Stic Investments |
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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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