Correlation Between Cameo Communications and Advanced Analog
Can any of the company-specific risk be diversified away by investing in both Cameo Communications and Advanced Analog 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 Cameo Communications and Advanced Analog into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cameo Communications and Advanced Analog Technology, you can compare the effects of market volatilities on Cameo Communications and Advanced Analog 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 Cameo Communications with a short position of Advanced Analog. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cameo Communications and Advanced Analog.
Diversification Opportunities for Cameo Communications and Advanced Analog
0.43 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Cameo and Advanced is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding Cameo Communications and Advanced Analog Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Advanced Analog Tech and Cameo Communications 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 Cameo Communications are associated (or correlated) with Advanced Analog. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Advanced Analog Tech has no effect on the direction of Cameo Communications i.e., Cameo Communications and Advanced Analog go up and down completely randomly.
Pair Corralation between Cameo Communications and Advanced Analog
Assuming the 90 days trading horizon Cameo Communications is expected to generate 1.03 times more return on investment than Advanced Analog. However, Cameo Communications is 1.03 times more volatile than Advanced Analog Technology. It trades about 0.03 of its potential returns per unit of risk. Advanced Analog Technology is currently generating about -0.03 per unit of risk. If you would invest 1,065 in Cameo Communications on December 2, 2024 and sell it today you would earn a total of 90.00 from holding Cameo Communications or generate 8.45% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cameo Communications vs. Advanced Analog Technology
Performance |
| Timeline |
| Cameo Communications |
| Advanced Analog Tech |
Cameo Communications and Advanced Analog Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cameo Communications and Advanced Analog
The main advantage of trading using opposite Cameo Communications and Advanced Analog positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cameo Communications position performs unexpectedly, Advanced Analog 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 Advanced Analog will offset losses from the drop in Advanced Analog's long position.| Cameo Communications vs. Gemtek Technology Co | Cameo Communications vs. CyberTAN Technology | Cameo Communications vs. Alpha Networks | Cameo Communications vs. D Link Corp |
| Advanced Analog vs. Chailease Holding Co | Advanced Analog vs. Shan Loong Transportation Co | Advanced Analog vs. CKM Building Material | Advanced Analog vs. DingZing Advanced Materials |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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