Correlation Between Arbor Technology and Scan D
Can any of the company-specific risk be diversified away by investing in both Arbor Technology and Scan D 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 Arbor Technology and Scan D into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Arbor Technology and Scan D, you can compare the effects of market volatilities on Arbor Technology and Scan D 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 Arbor Technology with a short position of Scan D. Check out your portfolio center. Please also check ongoing floating volatility patterns of Arbor Technology and Scan D.
Diversification Opportunities for Arbor Technology and Scan D
-0.64 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Arbor and Scan is -0.64. Overlapping area represents the amount of risk that can be diversified away by holding Arbor Technology and Scan D in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Scan D and Arbor Technology 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 Arbor Technology are associated (or correlated) with Scan D. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Scan D has no effect on the direction of Arbor Technology i.e., Arbor Technology and Scan D go up and down completely randomly.
Pair Corralation between Arbor Technology and Scan D
Assuming the 90 days trading horizon Arbor Technology is expected to under-perform the Scan D. In addition to that, Arbor Technology is 2.7 times more volatile than Scan D. It trades about -0.09 of its total potential returns per unit of risk. Scan D is currently generating about -0.16 per unit of volatility. If you would invest 3,470 in Scan D on October 29, 2024 and sell it today you would lose (100.00) from holding Scan D or give up 2.88% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Arbor Technology vs. Scan D
Performance |
| Timeline |
| Arbor Technology |
| Scan D |
Arbor Technology and Scan D Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Arbor Technology and Scan D
The main advantage of trading using opposite Arbor Technology and Scan D positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Arbor Technology position performs unexpectedly, Scan D 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 Scan D will offset losses from the drop in Scan D's long position.| Arbor Technology vs. Lian Hwa Foods | Arbor Technology vs. Hi Lai Foods Co | Arbor Technology vs. WiseChip Semiconductor | Arbor Technology vs. Taiwan Semiconductor Co |
| Scan D vs. LandMark Optoelectronics | Scan D vs. Asia Metal Industries | Scan D vs. Ligitek Electronics Co | Scan D vs. Sunspring Metal Corp |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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