Correlation Between Newretail and Aker Technology
Can any of the company-specific risk be diversified away by investing in both Newretail and Aker 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 Newretail and Aker Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Newretail Co and Aker Technology Co, you can compare the effects of market volatilities on Newretail and Aker 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 Newretail with a short position of Aker Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Newretail and Aker Technology.
Diversification Opportunities for Newretail and Aker Technology
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Newretail and Aker is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Newretail Co and Aker Technology Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aker Technology and Newretail 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 Newretail Co are associated (or correlated) with Aker Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aker Technology has no effect on the direction of Newretail i.e., Newretail and Aker Technology go up and down completely randomly.
Pair Corralation between Newretail and Aker Technology
Assuming the 90 days trading horizon Newretail Co is expected to generate 0.65 times more return on investment than Aker Technology. However, Newretail Co is 1.53 times less risky than Aker Technology. It trades about 0.23 of its potential returns per unit of risk. Aker Technology Co is currently generating about -0.34 per unit of risk. If you would invest 2,410 in Newretail Co on October 16, 2024 and sell it today you would earn a total of 210.00 from holding Newretail Co or generate 8.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Newretail Co vs. Aker Technology Co
Performance |
| Timeline |
| Newretail |
| Aker Technology |
Newretail and Aker Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Newretail and Aker Technology
The main advantage of trading using opposite Newretail and Aker Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Newretail position performs unexpectedly, Aker 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 Aker Technology will offset losses from the drop in Aker Technology's long position.| Newretail vs. Strong H Machinery | Newretail vs. Kindom Construction Corp | Newretail vs. Microelectronics Technology | Newretail vs. Advanced Wireless Semiconductor |
| Aker Technology vs. Aerospace Industrial Development | Aker Technology vs. De Licacy Industrial | Aker Technology vs. Wha Yu Industrial | Aker Technology vs. Unique Optical Industrial |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
Other Complementary Tools
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk | |
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios | |
| Content Syndication Quickly integrate customizable finance content to your own investment portal | |
| Sync Your Broker Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors. | |
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon |