Correlation Between Auden Techno and CyberTAN Technology
Can any of the company-specific risk be diversified away by investing in both Auden Techno and CyberTAN 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 Auden Techno and CyberTAN Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Auden Techno and CyberTAN Technology, you can compare the effects of market volatilities on Auden Techno and CyberTAN 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 Auden Techno with a short position of CyberTAN Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Auden Techno and CyberTAN Technology.
Diversification Opportunities for Auden Techno and CyberTAN Technology
0.18 | Correlation Coefficient |
Average diversification
The 3 months correlation between Auden and CyberTAN is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding Auden Techno and CyberTAN Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CyberTAN Technology and Auden Techno 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 Auden Techno are associated (or correlated) with CyberTAN Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CyberTAN Technology has no effect on the direction of Auden Techno i.e., Auden Techno and CyberTAN Technology go up and down completely randomly.
Pair Corralation between Auden Techno and CyberTAN Technology
Assuming the 90 days trading horizon Auden Techno is expected to under-perform the CyberTAN Technology. But the stock apears to be less risky and, when comparing its historical volatility, Auden Techno is 1.57 times less risky than CyberTAN Technology. The stock trades about -0.05 of its potential returns per unit of risk. The CyberTAN Technology is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 2,190 in CyberTAN Technology on September 14, 2024 and sell it today you would earn a total of 1,120 from holding CyberTAN Technology or generate 51.14% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Auden Techno vs. CyberTAN Technology
Performance |
| Timeline |
| Auden Techno |
| CyberTAN Technology |
Auden Techno and CyberTAN Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Auden Techno and CyberTAN Technology
The main advantage of trading using opposite Auden Techno and CyberTAN Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Auden Techno position performs unexpectedly, CyberTAN 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 CyberTAN Technology will offset losses from the drop in CyberTAN Technology's long position.| Auden Techno vs. CyberTAN Technology | Auden Techno vs. Merry Electronics Co | Auden Techno vs. Unizyx Holding Corp | Auden Techno vs. Microelectronics Technology |
| CyberTAN Technology vs. AU Optronics | CyberTAN Technology vs. Innolux Corp | CyberTAN Technology vs. Ruentex Development Co | CyberTAN Technology vs. WiseChip Semiconductor |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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