Correlation Between AurosTechnology and Ni Steel
Can any of the company-specific risk be diversified away by investing in both AurosTechnology and Ni Steel 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 AurosTechnology and Ni Steel into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AurosTechnology and Ni Steel, you can compare the effects of market volatilities on AurosTechnology and Ni Steel 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 AurosTechnology with a short position of Ni Steel. Check out your portfolio center. Please also check ongoing floating volatility patterns of AurosTechnology and Ni Steel.
Diversification Opportunities for AurosTechnology and Ni Steel
0.52 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between AurosTechnology and 008260 is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding AurosTechnology and Ni Steel in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ni Steel and AurosTechnology 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 AurosTechnology are associated (or correlated) with Ni Steel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ni Steel has no effect on the direction of AurosTechnology i.e., AurosTechnology and Ni Steel go up and down completely randomly.
Pair Corralation between AurosTechnology and Ni Steel
Assuming the 90 days trading horizon AurosTechnology is expected to generate 1.99 times more return on investment than Ni Steel. However, AurosTechnology is 1.99 times more volatile than Ni Steel. It trades about 0.02 of its potential returns per unit of risk. Ni Steel is currently generating about 0.0 per unit of risk. If you would invest 1,605,000 in AurosTechnology on September 3, 2024 and sell it today you would lose (191,000) from holding AurosTechnology or give up 11.9% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
AurosTechnology vs. Ni Steel
Performance |
| Timeline |
| AurosTechnology |
| Ni Steel |
AurosTechnology and Ni Steel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AurosTechnology and Ni Steel
The main advantage of trading using opposite AurosTechnology and Ni Steel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AurosTechnology position performs unexpectedly, Ni Steel 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 Ni Steel will offset losses from the drop in Ni Steel's long position.| AurosTechnology vs. Barunson Entertainment Arts | AurosTechnology vs. SM Entertainment Co | AurosTechnology vs. Tamul Multimedia Co | AurosTechnology vs. Korea Information Communications |
| Ni Steel vs. Jin Air Co | Ni Steel vs. Automobile Pc | Ni Steel vs. Taegu Broadcasting | Ni Steel vs. AurosTechnology |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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