Correlation Between Newretail and Analog Integrations
Can any of the company-specific risk be diversified away by investing in both Newretail and Analog Integrations 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 Analog Integrations into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Newretail Co and Analog Integrations, you can compare the effects of market volatilities on Newretail and Analog Integrations 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 Analog Integrations. Check out your portfolio center. Please also check ongoing floating volatility patterns of Newretail and Analog Integrations.
Diversification Opportunities for Newretail and Analog Integrations
-0.69 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Newretail and Analog is -0.69. Overlapping area represents the amount of risk that can be diversified away by holding Newretail Co and Analog Integrations in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Analog Integrations 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 Analog Integrations. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Analog Integrations has no effect on the direction of Newretail i.e., Newretail and Analog Integrations go up and down completely randomly.
Pair Corralation between Newretail and Analog Integrations
Assuming the 90 days trading horizon Newretail Co is expected to generate 1.86 times more return on investment than Analog Integrations. However, Newretail is 1.86 times more volatile than Analog Integrations. It trades about 0.08 of its potential returns per unit of risk. Analog Integrations is currently generating about -0.1 per unit of risk. If you would invest 1,265 in Newretail Co on September 14, 2024 and sell it today you would earn a total of 1,185 from holding Newretail Co or generate 93.68% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Newretail Co vs. Analog Integrations
Performance |
| Timeline |
| Newretail |
| Analog Integrations |
Newretail and Analog Integrations Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Newretail and Analog Integrations
The main advantage of trading using opposite Newretail and Analog Integrations positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Newretail position performs unexpectedly, Analog Integrations 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 Analog Integrations will offset losses from the drop in Analog Integrations' long position.| Newretail vs. Taichung Commercial Bank | Newretail vs. First Insurance Co | Newretail vs. Cathay Financial Holding | Newretail vs. EnTie Commercial Bank |
| Analog Integrations vs. Hunya Foods Co | Analog Integrations vs. Hannstar Display Corp | Analog Integrations vs. Tehmag Foods | Analog Integrations vs. Ever Clear Environmental Eng |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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