Correlation Between Alton Sports and Next Bt
Can any of the company-specific risk be diversified away by investing in both Alton Sports and Next Bt 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 Next Bt 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 Next Bt Co, you can compare the effects of market volatilities on Alton Sports and Next Bt 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 Next Bt. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alton Sports and Next Bt.
Diversification Opportunities for Alton Sports and Next Bt
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Alton and Next is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Alton Sports CoLtd and Next Bt Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Next Bt 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 Next Bt. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Next Bt has no effect on the direction of Alton Sports i.e., Alton Sports and Next Bt go up and down completely randomly.
Pair Corralation between Alton Sports and Next Bt
Assuming the 90 days trading horizon Alton Sports CoLtd is expected to under-perform the Next Bt. But the stock apears to be less risky and, when comparing its historical volatility, Alton Sports CoLtd is 2.06 times less risky than Next Bt. The stock trades about -0.17 of its potential returns per unit of risk. The Next Bt Co is currently generating about -0.08 of returns per unit of risk over similar time horizon. If you would invest 54,100 in Next Bt Co on September 3, 2024 and sell it today you would lose (34,700) from holding Next Bt Co or give up 64.14% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Alton Sports CoLtd vs. Next Bt Co
Performance |
| Timeline |
| Alton Sports CoLtd |
| Next Bt |
Alton Sports and Next Bt Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Alton Sports and Next Bt
The main advantage of trading using opposite Alton Sports and Next Bt positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alton Sports position performs unexpectedly, Next Bt 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 Next Bt will offset losses from the drop in Next Bt's long position.| Alton Sports vs. Korea Information Communications | Alton Sports vs. Korean Reinsurance Co | Alton Sports vs. Lotte Non Life Insurance | Alton Sports vs. Sempio Foods Co |
| Next Bt vs. Sejong Telecom | Next Bt vs. Korea Information Communications | Next Bt vs. PJ Metal Co | Next Bt vs. Myoung Shin Industrial |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
Other Complementary Tools
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope | |
| Stocks Directory Find actively traded stocks across global markets | |
| USA ETFs Find actively traded Exchange Traded Funds (ETF) in USA | |
| Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios | |
| Content Syndication Quickly integrate customizable finance content to your own investment portal |