Correlation Between Alton Sports and Insun Environment
Can any of the company-specific risk be diversified away by investing in both Alton Sports and Insun Environment 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 Alton Sports and Insun Environment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Alton Sports CoLtd and Insun Environment New, you can compare the effects of market volatilities on Alton Sports and Insun Environment 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 Alton Sports with a short position of Insun Environment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alton Sports and Insun Environment.
Diversification Opportunities for Alton Sports and Insun Environment
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Alton and Insun is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Alton Sports CoLtd and Insun Environment New in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Insun Environment New and Alton Sports 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 Alton Sports CoLtd are associated (or correlated) with Insun Environment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Insun Environment New has no effect on the direction of Alton Sports i.e., Alton Sports and Insun Environment go up and down completely randomly.
Pair Corralation between Alton Sports and Insun Environment
Assuming the 90 days trading horizon Alton Sports CoLtd is expected to under-perform the Insun Environment. In addition to that, Alton Sports is 1.44 times more volatile than Insun Environment New. It trades about -0.08 of its total potential returns per unit of risk. Insun Environment New is currently generating about -0.04 per unit of volatility. If you would invest 867,000 in Insun Environment New on October 14, 2024 and sell it today you would lose (297,000) from holding Insun Environment New or give up 34.26% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 95.83% |
| Values | Daily Returns |
Alton Sports CoLtd vs. Insun Environment New
Performance |
| Timeline |
| Alton Sports CoLtd |
| Insun Environment New |
Alton Sports and Insun Environment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Alton Sports and Insun Environment
The main advantage of trading using opposite Alton Sports and Insun Environment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alton Sports position performs unexpectedly, Insun Environment 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 Insun Environment will offset losses from the drop in Insun Environment's long position.| Alton Sports vs. Green Cross Medical | Alton Sports vs. Haitai Confectionery Foods | Alton Sports vs. Sempio Foods Co | Alton Sports vs. Lotte Non Life Insurance |
| Insun Environment vs. T3 Entertainment Co | Insun Environment vs. Alton Sports CoLtd | Insun Environment vs. SM Entertainment Co | Insun Environment vs. CU Medical Systems |
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 Valuation module to check real value of public entities based on technical and fundamental data.
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