Correlation Between Preferred Bank and 24SEVENOFFICE GROUP
Can any of the company-specific risk be diversified away by investing in both Preferred Bank and 24SEVENOFFICE GROUP 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 Preferred Bank and 24SEVENOFFICE GROUP into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Preferred Bank and 24SEVENOFFICE GROUP AB, you can compare the effects of market volatilities on Preferred Bank and 24SEVENOFFICE GROUP 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 Preferred Bank with a short position of 24SEVENOFFICE GROUP. Check out your portfolio center. Please also check ongoing floating volatility patterns of Preferred Bank and 24SEVENOFFICE GROUP.
Diversification Opportunities for Preferred Bank and 24SEVENOFFICE GROUP
0.27 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Preferred and 24SEVENOFFICE is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding Preferred Bank and 24SEVENOFFICE GROUP AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on 24SEVENOFFICE GROUP and Preferred Bank 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 Preferred Bank are associated (or correlated) with 24SEVENOFFICE GROUP. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of 24SEVENOFFICE GROUP has no effect on the direction of Preferred Bank i.e., Preferred Bank and 24SEVENOFFICE GROUP go up and down completely randomly.
Pair Corralation between Preferred Bank and 24SEVENOFFICE GROUP
Assuming the 90 days horizon Preferred Bank is expected to under-perform the 24SEVENOFFICE GROUP. In addition to that, Preferred Bank is 1.23 times more volatile than 24SEVENOFFICE GROUP AB. It trades about -0.35 of its total potential returns per unit of risk. 24SEVENOFFICE GROUP AB is currently generating about 0.37 per unit of volatility. If you would invest 196.00 in 24SEVENOFFICE GROUP AB on October 14, 2024 and sell it today you would earn a total of 15.00 from holding 24SEVENOFFICE GROUP AB or generate 7.65% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Preferred Bank vs. 24SEVENOFFICE GROUP AB
Performance |
| Timeline |
| Preferred Bank |
| 24SEVENOFFICE GROUP |
Preferred Bank and 24SEVENOFFICE GROUP Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Preferred Bank and 24SEVENOFFICE GROUP
The main advantage of trading using opposite Preferred Bank and 24SEVENOFFICE GROUP positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Preferred Bank position performs unexpectedly, 24SEVENOFFICE GROUP 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 24SEVENOFFICE GROUP will offset losses from the drop in 24SEVENOFFICE GROUP's long position.| Preferred Bank vs. ON SEMICONDUCTOR | Preferred Bank vs. FAST RETAIL ADR | Preferred Bank vs. FLOW TRADERS LTD | Preferred Bank vs. Magnachip Semiconductor |
| 24SEVENOFFICE GROUP vs. Preferred Bank | 24SEVENOFFICE GROUP vs. REVO INSURANCE SPA | 24SEVENOFFICE GROUP vs. COREBRIDGE FINANCIAL INC | 24SEVENOFFICE GROUP vs. Direct Line Insurance |
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 Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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