Correlation Between Sunspring Metal and Aker Technology
Can any of the company-specific risk be diversified away by investing in both Sunspring Metal and Aker 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 Sunspring Metal and Aker Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sunspring Metal Corp and Aker Technology Co, you can compare the effects of market volatilities on Sunspring Metal and Aker 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 Sunspring Metal with a short position of Aker Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sunspring Metal and Aker Technology.
Diversification Opportunities for Sunspring Metal and Aker Technology
-0.38 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Sunspring and Aker is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding Sunspring Metal Corp and Aker Technology Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aker Technology and Sunspring Metal 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 Sunspring Metal Corp are associated (or correlated) with Aker Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aker Technology has no effect on the direction of Sunspring Metal i.e., Sunspring Metal and Aker Technology go up and down completely randomly.
Pair Corralation between Sunspring Metal and Aker Technology
Assuming the 90 days trading horizon Sunspring Metal is expected to generate 5.77 times less return on investment than Aker Technology. But when comparing it to its historical volatility, Sunspring Metal Corp is 1.66 times less risky than Aker Technology. It trades about 0.04 of its potential returns per unit of risk. Aker Technology Co is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest 2,065 in Aker Technology Co on September 14, 2024 and sell it today you would earn a total of 325.00 from holding Aker Technology Co or generate 15.74% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sunspring Metal Corp vs. Aker Technology Co
Performance |
| Timeline |
| Sunspring Metal Corp |
| Aker Technology |
Sunspring Metal and Aker Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sunspring Metal and Aker Technology
The main advantage of trading using opposite Sunspring Metal and Aker Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sunspring Metal position performs unexpectedly, Aker 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 Aker Technology will offset losses from the drop in Aker Technology's long position.| Sunspring Metal vs. Yang Ming Marine | Sunspring Metal vs. Wan Hai Lines | Sunspring Metal vs. U Ming Marine Transport | Sunspring Metal vs. Taiwan Navigation Co |
| Aker Technology vs. Materials Analysis Technology | Aker Technology vs. Genovate Biotechnology Co | Aker Technology vs. Shan Loong Transportation Co | Aker Technology vs. Thermaltake Technology Co |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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