Correlation Between Continental Holdings and Acter
Can any of the company-specific risk be diversified away by investing in both Continental Holdings and Acter 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 Continental Holdings and Acter into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Continental Holdings Corp and Acter Co, you can compare the effects of market volatilities on Continental Holdings and Acter 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 Continental Holdings with a short position of Acter. Check out your portfolio center. Please also check ongoing floating volatility patterns of Continental Holdings and Acter.
Diversification Opportunities for Continental Holdings and Acter
-0.02 | Correlation Coefficient |
Good diversification
The 3 months correlation between Continental and Acter is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding Continental Holdings Corp and Acter Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Acter and Continental Holdings 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 Continental Holdings Corp are associated (or correlated) with Acter. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Acter has no effect on the direction of Continental Holdings i.e., Continental Holdings and Acter go up and down completely randomly.
Pair Corralation between Continental Holdings and Acter
Assuming the 90 days trading horizon Continental Holdings is expected to generate 18.87 times less return on investment than Acter. But when comparing it to its historical volatility, Continental Holdings Corp is 1.21 times less risky than Acter. It trades about 0.01 of its potential returns per unit of risk. Acter Co is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest 11,733 in Acter Co on November 27, 2024 and sell it today you would earn a total of 31,067 from holding Acter Co or generate 264.78% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Continental Holdings Corp vs. Acter Co
Performance |
| Timeline |
| Continental Holdings Corp |
| Acter |
Continental Holdings and Acter Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Continental Holdings and Acter
The main advantage of trading using opposite Continental Holdings and Acter positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Continental Holdings position performs unexpectedly, Acter 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 Acter will offset losses from the drop in Acter's long position.| Continental Holdings vs. BES Engineering Co | Continental Holdings vs. Chien Kuo Construction | Continental Holdings vs. Hung Sheng Construction | Continental Holdings vs. YungShin Global Holding |
| Acter vs. United Integrated Services | Acter vs. Topco Scientific Co | Acter vs. Nova Technology | Acter vs. Simplo Technology 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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