Correlation Between Double Bond and Axiomtek
Can any of the company-specific risk be diversified away by investing in both Double Bond and Axiomtek 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 Double Bond and Axiomtek into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Double Bond Chemical and Axiomtek Co, you can compare the effects of market volatilities on Double Bond and Axiomtek 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 Double Bond with a short position of Axiomtek. Check out your portfolio center. Please also check ongoing floating volatility patterns of Double Bond and Axiomtek.
Diversification Opportunities for Double Bond and Axiomtek
0.08 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Double and Axiomtek is 0.08. Overlapping area represents the amount of risk that can be diversified away by holding Double Bond Chemical and Axiomtek Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Axiomtek and Double Bond 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 Double Bond Chemical are associated (or correlated) with Axiomtek. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Axiomtek has no effect on the direction of Double Bond i.e., Double Bond and Axiomtek go up and down completely randomly.
Pair Corralation between Double Bond and Axiomtek
Assuming the 90 days trading horizon Double Bond is expected to generate 2.95 times less return on investment than Axiomtek. But when comparing it to its historical volatility, Double Bond Chemical is 1.29 times less risky than Axiomtek. It trades about 0.02 of its potential returns per unit of risk. Axiomtek Co is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 8,472 in Axiomtek Co on September 2, 2024 and sell it today you would earn a total of 2,078 from holding Axiomtek Co or generate 24.53% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Double Bond Chemical vs. Axiomtek Co
Performance |
| Timeline |
| Double Bond Chemical |
| Axiomtek |
Double Bond and Axiomtek Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Double Bond and Axiomtek
The main advantage of trading using opposite Double Bond and Axiomtek positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Double Bond position performs unexpectedly, Axiomtek 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 Axiomtek will offset losses from the drop in Axiomtek's long position.| Double Bond vs. Coremax Corp | Double Bond vs. Phytohealth Corp | Double Bond vs. Shiny Chemical Industrial | Double Bond vs. YungShin Global Holding |
| Axiomtek vs. Silicon Power Computer | Axiomtek vs. Double Bond Chemical | Axiomtek vs. Chi Sheng Chemical | Axiomtek vs. Taita Chemical 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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.
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