Correlation Between Acter and Nova Technology
Can any of the company-specific risk be diversified away by investing in both Acter and Nova Technology 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 Acter and Nova Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Acter Co and Nova Technology, you can compare the effects of market volatilities on Acter and Nova Technology 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 Acter with a short position of Nova Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Acter and Nova Technology.
Diversification Opportunities for Acter and Nova Technology
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Acter and Nova is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Acter Co and Nova Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nova Technology and Acter 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 Acter Co are associated (or correlated) with Nova Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nova Technology has no effect on the direction of Acter i.e., Acter and Nova Technology go up and down completely randomly.
Pair Corralation between Acter and Nova Technology
Assuming the 90 days trading horizon Acter Co is expected to under-perform the Nova Technology. In addition to that, Acter is 1.27 times more volatile than Nova Technology. It trades about -0.21 of its total potential returns per unit of risk. Nova Technology is currently generating about 0.03 per unit of volatility. If you would invest 18,650 in Nova Technology on September 1, 2024 and sell it today you would earn a total of 150.00 from holding Nova Technology or generate 0.8% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Acter Co vs. Nova Technology
Performance |
| Timeline |
| Acter |
| Nova Technology |
Acter and Nova Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Acter and Nova Technology
The main advantage of trading using opposite Acter and Nova Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Acter position performs unexpectedly, Nova Technology 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 Nova Technology will offset losses from the drop in Nova Technology's long position.| Acter vs. United Integrated Services | Acter vs. Topco Scientific Co | Acter vs. Nova Technology | Acter vs. Simplo Technology Co |
| Nova Technology vs. Golden Friends | Nova Technology vs. Sunonwealth Electric Machine | Nova Technology vs. Rechi Precision Co | Nova Technology vs. Fittech 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
Other Complementary Tools
| CEOs Directory Screen CEOs from public companies around the world | |
| Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets | |
| Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital | |
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios | |
| Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings |