Correlation Between Aker Technology and Eternal Materials
Can any of the company-specific risk be diversified away by investing in both Aker Technology and Eternal Materials 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 Aker Technology and Eternal Materials into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aker Technology Co and Eternal Materials Co, you can compare the effects of market volatilities on Aker Technology and Eternal Materials 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 Aker Technology with a short position of Eternal Materials. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aker Technology and Eternal Materials.
Diversification Opportunities for Aker Technology and Eternal Materials
-0.39 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Aker and Eternal is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding Aker Technology Co and Eternal Materials Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eternal Materials and Aker Technology 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 Aker Technology Co are associated (or correlated) with Eternal Materials. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eternal Materials has no effect on the direction of Aker Technology i.e., Aker Technology and Eternal Materials go up and down completely randomly.
Pair Corralation between Aker Technology and Eternal Materials
Assuming the 90 days trading horizon Aker Technology Co is expected to generate 4.76 times more return on investment than Eternal Materials. However, Aker Technology is 4.76 times more volatile than Eternal Materials Co. It trades about 0.15 of its potential returns per unit of risk. Eternal Materials Co is currently generating about -0.14 per unit of risk. If you would invest 2,145 in Aker Technology Co on September 13, 2024 and sell it today you would earn a total of 325.00 from holding Aker Technology Co or generate 15.15% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aker Technology Co vs. Eternal Materials Co
Performance |
| Timeline |
| Aker Technology |
| Eternal Materials |
Aker Technology and Eternal Materials Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aker Technology and Eternal Materials
The main advantage of trading using opposite Aker Technology and Eternal Materials positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aker Technology position performs unexpectedly, Eternal Materials 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 Eternal Materials will offset losses from the drop in Eternal Materials' long position.| Aker Technology vs. Farglory FTZ Investment | Aker Technology vs. Quanta Computer | Aker Technology vs. Sunspring Metal Corp | Aker Technology vs. Louisa Professional Coffee |
| Eternal Materials vs. Tainan Spinning Co | Eternal Materials vs. Lealea Enterprise Co | Eternal Materials vs. China Petrochemical Development | Eternal Materials vs. Ruentex Development 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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