Correlation Between American Public and BANK HANDLOWY
Can any of the company-specific risk be diversified away by investing in both American Public and BANK HANDLOWY 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 American Public and BANK HANDLOWY into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between American Public Education and BANK HANDLOWY, you can compare the effects of market volatilities on American Public and BANK HANDLOWY 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 American Public with a short position of BANK HANDLOWY. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Public and BANK HANDLOWY.
Diversification Opportunities for American Public and BANK HANDLOWY
-0.02 | Correlation Coefficient |
Good diversification
The 3 months correlation between American and BANK is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding American Public Education and BANK HANDLOWY in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BANK HANDLOWY and American Public 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 American Public Education are associated (or correlated) with BANK HANDLOWY. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BANK HANDLOWY has no effect on the direction of American Public i.e., American Public and BANK HANDLOWY go up and down completely randomly.
Pair Corralation between American Public and BANK HANDLOWY
Assuming the 90 days horizon American Public Education is expected to under-perform the BANK HANDLOWY. In addition to that, American Public is 2.24 times more volatile than BANK HANDLOWY. It trades about -0.02 of its total potential returns per unit of risk. BANK HANDLOWY is currently generating about 0.17 per unit of volatility. If you would invest 2,105 in BANK HANDLOWY on October 20, 2024 and sell it today you would earn a total of 55.00 from holding BANK HANDLOWY or generate 2.61% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 94.44% |
| Values | Daily Returns |
American Public Education vs. BANK HANDLOWY
Performance |
| Timeline |
| American Public Education |
| BANK HANDLOWY |
American Public and BANK HANDLOWY Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with American Public and BANK HANDLOWY
The main advantage of trading using opposite American Public and BANK HANDLOWY positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Public position performs unexpectedly, BANK HANDLOWY 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 BANK HANDLOWY will offset losses from the drop in BANK HANDLOWY's long position.| American Public vs. Datang International Power | American Public vs. Gol Intelligent Airlines | American Public vs. International Consolidated Airlines | American Public vs. China Eastern Airlines |
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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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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