Correlation Between CU Tech and APS Holdings
Can any of the company-specific risk be diversified away by investing in both CU Tech and APS Holdings 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 APS Holdings 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 APS Holdings, you can compare the effects of market volatilities on CU Tech and APS Holdings 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 APS Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of CU Tech and APS Holdings.
Diversification Opportunities for CU Tech and APS Holdings
0.19 | Correlation Coefficient |
Average diversification
The 3 months correlation between 376290 and APS is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding CU Tech Corp and APS Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on APS Holdings 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 APS Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of APS Holdings has no effect on the direction of CU Tech i.e., CU Tech and APS Holdings go up and down completely randomly.
Pair Corralation between CU Tech and APS Holdings
Assuming the 90 days trading horizon CU Tech Corp is expected to generate 0.84 times more return on investment than APS Holdings. However, CU Tech Corp is 1.19 times less risky than APS Holdings. It trades about -0.21 of its potential returns per unit of risk. APS Holdings is currently generating about -0.34 per unit of risk. If you would invest 316,500 in CU Tech Corp on September 3, 2024 and sell it today you would lose (18,000) from holding CU Tech Corp or give up 5.69% 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. APS Holdings
Performance |
| Timeline |
| CU Tech Corp |
| APS Holdings |
CU Tech and APS Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CU Tech and APS Holdings
The main advantage of trading using opposite CU Tech and APS Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CU Tech position performs unexpectedly, APS Holdings 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 APS Holdings will offset losses from the drop in APS Holdings' long position.| CU Tech vs. Taeyang Metal Industrial | CU Tech vs. Hanjoo Light Metal | CU Tech vs. Netmarble Games Corp | CU Tech vs. Tway Air Co |
| APS Holdings vs. Cots Technology Co | APS Holdings vs. CU Tech Corp | APS Holdings vs. LG Chemicals | APS Holdings vs. PH Tech 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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