Correlation Between Coremax Corp and Allied Industrial
Can any of the company-specific risk be diversified away by investing in both Coremax Corp and Allied Industrial 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 Coremax Corp and Allied Industrial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Coremax Corp and Allied Industrial, you can compare the effects of market volatilities on Coremax Corp and Allied Industrial 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 Coremax Corp with a short position of Allied Industrial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Coremax Corp and Allied Industrial.
Diversification Opportunities for Coremax Corp and Allied Industrial
-0.6 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Coremax and Allied is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding Coremax Corp and Allied Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Allied Industrial and Coremax Corp 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 Coremax Corp are associated (or correlated) with Allied Industrial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Allied Industrial has no effect on the direction of Coremax Corp i.e., Coremax Corp and Allied Industrial go up and down completely randomly.
Pair Corralation between Coremax Corp and Allied Industrial
Assuming the 90 days trading horizon Coremax Corp is expected to generate 0.83 times more return on investment than Allied Industrial. However, Coremax Corp is 1.21 times less risky than Allied Industrial. It trades about -0.12 of its potential returns per unit of risk. Allied Industrial is currently generating about -0.19 per unit of risk. If you would invest 5,670 in Coremax Corp on October 26, 2024 and sell it today you would lose (220.00) from holding Coremax Corp or give up 3.88% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Coremax Corp vs. Allied Industrial
Performance |
| Timeline |
| Coremax Corp |
| Allied Industrial |
Coremax Corp and Allied Industrial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Coremax Corp and Allied Industrial
The main advantage of trading using opposite Coremax Corp and Allied Industrial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Coremax Corp position performs unexpectedly, Allied Industrial 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 Allied Industrial will offset losses from the drop in Allied Industrial's long position.| Coremax Corp vs. Nan Ya Plastics | Coremax Corp vs. China Petrochemical Development | Coremax Corp vs. Eternal Materials Co | Coremax Corp vs. TSRC Corp |
| Allied Industrial vs. Sunspring Metal Corp | Allied Industrial vs. Aerospace Industrial Development | Allied Industrial vs. Thinking Electronic Industrial | Allied Industrial vs. I Jang Industrial |
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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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