Correlation Between Altek Corp and Aces Electronics
Can any of the company-specific risk be diversified away by investing in both Altek Corp and Aces Electronics 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 Altek Corp and Aces Electronics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Altek Corp and Aces Electronics Co, you can compare the effects of market volatilities on Altek Corp and Aces Electronics 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 Altek Corp with a short position of Aces Electronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Altek Corp and Aces Electronics.
Diversification Opportunities for Altek Corp and Aces Electronics
-0.16 | Correlation Coefficient |
Good diversification
The 3 months correlation between Altek and Aces is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding Altek Corp and Aces Electronics Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aces Electronics and Altek Corp 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 Altek Corp are associated (or correlated) with Aces Electronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aces Electronics has no effect on the direction of Altek Corp i.e., Altek Corp and Aces Electronics go up and down completely randomly.
Pair Corralation between Altek Corp and Aces Electronics
Assuming the 90 days trading horizon Altek Corp is expected to generate 2.98 times more return on investment than Aces Electronics. However, Altek Corp is 2.98 times more volatile than Aces Electronics Co. It trades about 0.21 of its potential returns per unit of risk. Aces Electronics Co is currently generating about -0.32 per unit of risk. If you would invest 3,045 in Altek Corp on October 12, 2024 and sell it today you would earn a total of 615.00 from holding Altek Corp or generate 20.2% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Altek Corp vs. Aces Electronics Co
Performance |
| Timeline |
| Altek Corp |
| Aces Electronics |
Altek Corp and Aces Electronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Altek Corp and Aces Electronics
The main advantage of trading using opposite Altek Corp and Aces Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Altek Corp position performs unexpectedly, Aces Electronics 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 Aces Electronics will offset losses from the drop in Aces Electronics' long position.| Altek Corp vs. Ability Enterprise Co | Altek Corp vs. Sunplus Technology Co | Altek Corp vs. ALi Corp | Altek Corp vs. Edom Technology Co |
| Aces Electronics vs. Chant Sincere Co | Aces Electronics vs. Altek Corp | Aces Electronics vs. Jentech Precision Industrial | Aces Electronics vs. Lotes 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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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