Correlation Between Action Electronics and Amtran Technology
Can any of the company-specific risk be diversified away by investing in both Action Electronics and Amtran 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 Action Electronics and Amtran Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Action Electronics Co and Amtran Technology Co, you can compare the effects of market volatilities on Action Electronics and Amtran 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 Action Electronics with a short position of Amtran Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Action Electronics and Amtran Technology.
Diversification Opportunities for Action Electronics and Amtran Technology
-0.24 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Action and Amtran is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding Action Electronics Co and Amtran Technology Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amtran Technology and Action Electronics 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 Action Electronics Co are associated (or correlated) with Amtran Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Amtran Technology has no effect on the direction of Action Electronics i.e., Action Electronics and Amtran Technology go up and down completely randomly.
Pair Corralation between Action Electronics and Amtran Technology
Assuming the 90 days trading horizon Action Electronics Co is expected to generate 0.92 times more return on investment than Amtran Technology. However, Action Electronics Co is 1.09 times less risky than Amtran Technology. It trades about 0.0 of its potential returns per unit of risk. Amtran Technology Co is currently generating about 0.0 per unit of risk. If you would invest 2,190 in Action Electronics Co on September 1, 2024 and sell it today you would lose (105.00) from holding Action Electronics Co or give up 4.79% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.22% |
| Values | Daily Returns |
Action Electronics Co vs. Amtran Technology Co
Performance |
| Timeline |
| Action Electronics |
| Amtran Technology |
Action Electronics and Amtran Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Action Electronics and Amtran Technology
The main advantage of trading using opposite Action Electronics and Amtran Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Action Electronics position performs unexpectedly, Amtran 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 Amtran Technology will offset losses from the drop in Amtran Technology's long position.| Action Electronics vs. Chaintech Technology Corp | Action Electronics vs. AVerMedia Technologies | Action Electronics vs. Avision | Action Electronics vs. Clevo Co |
| Amtran Technology vs. Chaintech Technology Corp | Amtran Technology vs. AVerMedia Technologies | Amtran Technology vs. Avision | Amtran Technology vs. Clevo 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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
Other Complementary Tools
| Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges | |
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets | |
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon | |
| Top Crypto Exchanges Search and analyze digital assets across top global cryptocurrency exchanges | |
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities |