Correlation Between Camellia Metal and Actron Technology
Can any of the company-specific risk be diversified away by investing in both Camellia Metal and Actron 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 Camellia Metal and Actron Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Camellia Metal Co and Actron Technology, you can compare the effects of market volatilities on Camellia Metal and Actron 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 Camellia Metal with a short position of Actron Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Camellia Metal and Actron Technology.
Diversification Opportunities for Camellia Metal and Actron Technology
0.37 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Camellia and Actron is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding Camellia Metal Co and Actron Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Actron Technology and Camellia 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 Camellia Metal Co are associated (or correlated) with Actron Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Actron Technology has no effect on the direction of Camellia Metal i.e., Camellia Metal and Actron Technology go up and down completely randomly.
Pair Corralation between Camellia Metal and Actron Technology
Assuming the 90 days trading horizon Camellia Metal Co is expected to generate 1.2 times more return on investment than Actron Technology. However, Camellia Metal is 1.2 times more volatile than Actron Technology. It trades about -0.05 of its potential returns per unit of risk. Actron Technology is currently generating about -0.07 per unit of risk. If you would invest 1,585 in Camellia Metal Co on October 24, 2024 and sell it today you would lose (95.00) from holding Camellia Metal Co or give up 5.99% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Camellia Metal Co vs. Actron Technology
Performance |
| Timeline |
| Camellia Metal |
| Actron Technology |
Camellia Metal and Actron Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Camellia Metal and Actron Technology
The main advantage of trading using opposite Camellia Metal and Actron Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Camellia Metal position performs unexpectedly, Actron 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 Actron Technology will offset losses from the drop in Actron Technology's long position.| Camellia Metal vs. Standard Foods Corp | Camellia Metal vs. Cathay Chemical Works | Camellia Metal vs. Grand Pacific Petrochemical | Camellia Metal vs. Yung Zip Chemical |
| Actron Technology vs. SciVision Biotech | Actron Technology vs. Camellia Metal Co | Actron Technology vs. First Copper Technology | Actron Technology vs. Arbor Technology |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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