Correlation Between People Technology and AurosTechnology
Can any of the company-specific risk be diversified away by investing in both People Technology and AurosTechnology 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 People Technology and AurosTechnology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between People Technology and AurosTechnology, you can compare the effects of market volatilities on People Technology and AurosTechnology 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 People Technology with a short position of AurosTechnology. Check out your portfolio center. Please also check ongoing floating volatility patterns of People Technology and AurosTechnology.
Diversification Opportunities for People Technology and AurosTechnology
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between People and AurosTechnology is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding People Technology and AurosTechnology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AurosTechnology and People Technology 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 People Technology are associated (or correlated) with AurosTechnology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AurosTechnology has no effect on the direction of People Technology i.e., People Technology and AurosTechnology go up and down completely randomly.
Pair Corralation between People Technology and AurosTechnology
Assuming the 90 days trading horizon People Technology is expected to under-perform the AurosTechnology. In addition to that, People Technology is 1.16 times more volatile than AurosTechnology. It trades about -0.21 of its total potential returns per unit of risk. AurosTechnology is currently generating about -0.23 per unit of volatility. If you would invest 1,696,000 in AurosTechnology on September 1, 2024 and sell it today you would lose (282,000) from holding AurosTechnology or give up 16.63% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
People Technology vs. AurosTechnology
Performance |
| Timeline |
| People Technology |
| AurosTechnology |
People Technology and AurosTechnology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with People Technology and AurosTechnology
The main advantage of trading using opposite People Technology and AurosTechnology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if People Technology position performs unexpectedly, AurosTechnology 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 AurosTechnology will offset losses from the drop in AurosTechnology's long position.| People Technology vs. Korea New Network | People Technology vs. ICD Co | People Technology vs. DYPNF CoLtd | People Technology vs. Busan Industrial Co |
| AurosTechnology vs. Digital Power Communications | AurosTechnology vs. Innowireless Co | AurosTechnology vs. Ssangyong Information Communication | AurosTechnology vs. Automobile Pc |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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