Correlation Between CU Tech and Atinum Investment
Can any of the company-specific risk be diversified away by investing in both CU Tech and Atinum Investment 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 CU Tech and Atinum Investment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CU Tech Corp and Atinum Investment Co, you can compare the effects of market volatilities on CU Tech and Atinum Investment 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 CU Tech with a short position of Atinum Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of CU Tech and Atinum Investment.
Diversification Opportunities for CU Tech and Atinum Investment
0.08 | Correlation Coefficient |
Significant diversification
The 3 months correlation between 376290 and Atinum is 0.08. Overlapping area represents the amount of risk that can be diversified away by holding CU Tech Corp and Atinum Investment Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Atinum Investment and CU Tech 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 CU Tech Corp are associated (or correlated) with Atinum Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Atinum Investment has no effect on the direction of CU Tech i.e., CU Tech and Atinum Investment go up and down completely randomly.
Pair Corralation between CU Tech and Atinum Investment
Assuming the 90 days trading horizon CU Tech Corp is expected to generate 0.46 times more return on investment than Atinum Investment. However, CU Tech Corp is 2.17 times less risky than Atinum Investment. It trades about -0.19 of its potential returns per unit of risk. Atinum Investment Co is currently generating about -0.1 per unit of risk. If you would invest 315,500 in CU Tech Corp on September 2, 2024 and sell it today you would lose (17,000) from holding CU Tech Corp or give up 5.39% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
CU Tech Corp vs. Atinum Investment Co
Performance |
| Timeline |
| CU Tech Corp |
| Atinum Investment |
CU Tech and Atinum Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CU Tech and Atinum Investment
The main advantage of trading using opposite CU Tech and Atinum Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CU Tech position performs unexpectedly, Atinum Investment 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 Atinum Investment will offset losses from the drop in Atinum Investment's long position.The idea behind CU Tech Corp and Atinum Investment Co pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Atinum Investment vs. Samsung Electronics Co | Atinum Investment vs. Samsung Electronics Co | Atinum Investment vs. KB Financial Group | Atinum Investment vs. Shinhan Financial Group |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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