Correlation Between Alliance Financial and EA Technique
Can any of the company-specific risk be diversified away by investing in both Alliance Financial and EA Technique 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 Alliance Financial and EA Technique into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Alliance Financial Group and EA Technique M, you can compare the effects of market volatilities on Alliance Financial and EA Technique 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 Alliance Financial with a short position of EA Technique. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alliance Financial and EA Technique.
Diversification Opportunities for Alliance Financial and EA Technique
-0.44 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Alliance and 5259 is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding Alliance Financial Group and EA Technique M in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EA Technique M and Alliance Financial 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 Alliance Financial Group are associated (or correlated) with EA Technique. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of EA Technique M has no effect on the direction of Alliance Financial i.e., Alliance Financial and EA Technique go up and down completely randomly.
Pair Corralation between Alliance Financial and EA Technique
Assuming the 90 days trading horizon Alliance Financial is expected to generate 2.1 times less return on investment than EA Technique. But when comparing it to its historical volatility, Alliance Financial Group is 1.46 times less risky than EA Technique. It trades about 0.0 of its potential returns per unit of risk. EA Technique M is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 30.00 in EA Technique M on September 12, 2024 and sell it today you would earn a total of 0.00 from holding EA Technique M or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Alliance Financial Group vs. EA Technique M
Performance |
| Timeline |
| Alliance Financial |
| EA Technique M |
Alliance Financial and EA Technique Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Alliance Financial and EA Technique
The main advantage of trading using opposite Alliance Financial and EA Technique positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alliance Financial position performs unexpectedly, EA Technique 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 EA Technique will offset losses from the drop in EA Technique's long position.| Alliance Financial vs. Homeritz Bhd | Alliance Financial vs. CPE Technology Berhad | Alliance Financial vs. Farm Price Holdings | Alliance Financial vs. Malaysia Steel Works |
| EA Technique vs. CPE Technology Berhad | EA Technique vs. Hong Leong Bank | EA Technique vs. JF Technology BHD | EA Technique vs. Alliance Financial Group |
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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