Correlation Between Amtran Technology and Bright Led
Can any of the company-specific risk be diversified away by investing in both Amtran Technology and Bright Led 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 Amtran Technology and Bright Led into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Amtran Technology Co and Bright Led Electronics, you can compare the effects of market volatilities on Amtran Technology and Bright Led 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 Amtran Technology with a short position of Bright Led. Check out your portfolio center. Please also check ongoing floating volatility patterns of Amtran Technology and Bright Led.
Diversification Opportunities for Amtran Technology and Bright Led
-0.41 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Amtran and Bright is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding Amtran Technology Co and Bright Led Electronics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bright Led Electronics and Amtran 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 Amtran Technology Co are associated (or correlated) with Bright Led. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bright Led Electronics has no effect on the direction of Amtran Technology i.e., Amtran Technology and Bright Led go up and down completely randomly.
Pair Corralation between Amtran Technology and Bright Led
Assuming the 90 days trading horizon Amtran Technology Co is expected to generate 0.78 times more return on investment than Bright Led. However, Amtran Technology Co is 1.28 times less risky than Bright Led. It trades about 0.25 of its potential returns per unit of risk. Bright Led Electronics is currently generating about 0.16 per unit of risk. If you would invest 1,775 in Amtran Technology Co on November 29, 2024 and sell it today you would earn a total of 115.00 from holding Amtran Technology Co or generate 6.48% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Amtran Technology Co vs. Bright Led Electronics
Performance |
| Timeline |
| Amtran Technology |
| Bright Led Electronics |
Amtran Technology and Bright Led Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Amtran Technology and Bright Led
The main advantage of trading using opposite Amtran Technology and Bright Led positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Amtran Technology position performs unexpectedly, Bright Led 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 Bright Led will offset losses from the drop in Bright Led's long position.| Amtran Technology vs. Li Kang Biomedical | Amtran Technology vs. Excelsior Medical Co | Amtran Technology vs. Qualipoly Chemical Corp | Amtran Technology vs. Mechema Chemicals Int |
| Bright Led vs. Everlight Electronics Co | Bright Led vs. Harvatek Corp | Bright Led vs. Optotech Corp | Bright Led vs. I Chiun Precision Industry |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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