Correlation Between New Advanced and Materials Analysis
Can any of the company-specific risk be diversified away by investing in both New Advanced and Materials Analysis 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 New Advanced and Materials Analysis into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between New Advanced Electronics and Materials Analysis Technology, you can compare the effects of market volatilities on New Advanced and Materials Analysis 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 New Advanced with a short position of Materials Analysis. Check out your portfolio center. Please also check ongoing floating volatility patterns of New Advanced and Materials Analysis.
Diversification Opportunities for New Advanced and Materials Analysis
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between New and Materials is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding New Advanced Electronics and Materials Analysis Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Materials Analysis and New Advanced 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 New Advanced Electronics are associated (or correlated) with Materials Analysis. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Materials Analysis has no effect on the direction of New Advanced i.e., New Advanced and Materials Analysis go up and down completely randomly.
Pair Corralation between New Advanced and Materials Analysis
Assuming the 90 days trading horizon New Advanced Electronics is expected to under-perform the Materials Analysis. But the stock apears to be less risky and, when comparing its historical volatility, New Advanced Electronics is 1.28 times less risky than Materials Analysis. The stock trades about -0.03 of its potential returns per unit of risk. The Materials Analysis Technology is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 14,173 in Materials Analysis Technology on September 14, 2024 and sell it today you would earn a total of 11,177 from holding Materials Analysis Technology or generate 78.86% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
New Advanced Electronics vs. Materials Analysis Technology
Performance |
| Timeline |
| New Advanced Electronics |
| Materials Analysis |
New Advanced and Materials Analysis Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with New Advanced and Materials Analysis
The main advantage of trading using opposite New Advanced and Materials Analysis positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if New Advanced position performs unexpectedly, Materials Analysis 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 Materials Analysis will offset losses from the drop in Materials Analysis' long position.| New Advanced vs. Materials Analysis Technology | New Advanced vs. Hunya Foods Co | New Advanced vs. Lian Hwa Foods | New Advanced vs. Yuan High Tech Development |
| Materials Analysis vs. Integrated Service Technology | Materials Analysis vs. ASE Industrial Holding | Materials Analysis vs. eMemory Technology | Materials Analysis vs. Ruentex Development 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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
Other Complementary Tools
| Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios | |
| Content Syndication Quickly integrate customizable finance content to your own investment portal | |
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk | |
| Equity Valuation Check real value of public entities based on technical and fundamental data | |
| Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance |