Correlation Between Altek Corp and Aiptek International
Can any of the company-specific risk be diversified away by investing in both Altek Corp and Aiptek International 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 Aiptek International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Altek Corp and Aiptek International, you can compare the effects of market volatilities on Altek Corp and Aiptek International 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 Aiptek International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Altek Corp and Aiptek International.
Diversification Opportunities for Altek Corp and Aiptek International
0.2 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Altek and Aiptek is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding Altek Corp and Aiptek International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aiptek International 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 Aiptek International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aiptek International has no effect on the direction of Altek Corp i.e., Altek Corp and Aiptek International go up and down completely randomly.
Pair Corralation between Altek Corp and Aiptek International
Assuming the 90 days trading horizon Altek Corp is expected to under-perform the Aiptek International. But the stock apears to be less risky and, when comparing its historical volatility, Altek Corp is 1.56 times less risky than Aiptek International. The stock trades about -0.14 of its potential returns per unit of risk. The Aiptek International is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 1,565 in Aiptek International on September 1, 2024 and sell it today you would earn a total of 5.00 from holding Aiptek International or generate 0.32% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Altek Corp vs. Aiptek International
Performance |
| Timeline |
| Altek Corp |
| Aiptek International |
Altek Corp and Aiptek International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Altek Corp and Aiptek International
The main advantage of trading using opposite Altek Corp and Aiptek International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Altek Corp position performs unexpectedly, Aiptek International 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 Aiptek International will offset losses from the drop in Aiptek International's long position.| Altek Corp vs. Chaintech Technology Corp | Altek Corp vs. AVerMedia Technologies | Altek Corp vs. Avision | Altek Corp vs. Clevo Co |
| Aiptek International vs. Chaintech Technology Corp | Aiptek International vs. AVerMedia Technologies | Aiptek International vs. Avision | Aiptek International 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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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