Correlation Between Aiptek International and Horizon Securities
Can any of the company-specific risk be diversified away by investing in both Aiptek International and Horizon Securities 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 Aiptek International and Horizon Securities into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aiptek International and Horizon Securities Co, you can compare the effects of market volatilities on Aiptek International and Horizon Securities 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 Aiptek International with a short position of Horizon Securities. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aiptek International and Horizon Securities.
Diversification Opportunities for Aiptek International and Horizon Securities
-0.38 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Aiptek and Horizon is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding Aiptek International and Horizon Securities Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Horizon Securities and Aiptek International 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 Aiptek International are associated (or correlated) with Horizon Securities. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Horizon Securities has no effect on the direction of Aiptek International i.e., Aiptek International and Horizon Securities go up and down completely randomly.
Pair Corralation between Aiptek International and Horizon Securities
Assuming the 90 days trading horizon Aiptek International is expected to generate 1.76 times more return on investment than Horizon Securities. However, Aiptek International is 1.76 times more volatile than Horizon Securities Co. It trades about 0.04 of its potential returns per unit of risk. Horizon Securities Co is currently generating about 0.03 per unit of risk. If you would invest 1,030 in Aiptek International on September 3, 2024 and sell it today you would earn a total of 540.00 from holding Aiptek International or generate 52.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aiptek International vs. Horizon Securities Co
Performance |
| Timeline |
| Aiptek International |
| Horizon Securities |
Aiptek International and Horizon Securities Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aiptek International and Horizon Securities
The main advantage of trading using opposite Aiptek International and Horizon Securities positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aiptek International position performs unexpectedly, Horizon Securities 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 Horizon Securities will offset losses from the drop in Horizon Securities' long position.| Aiptek International vs. Kinko Optical Co | Aiptek International vs. Altek Corp | Aiptek International vs. Harvatek Corp | Aiptek International vs. Asia Optical Co |
| Horizon Securities vs. Concord Securities Co | Horizon Securities vs. Capital Securities Corp | Horizon Securities vs. Sinopac Financial Holdings | Horizon Securities vs. Inventec Corp |
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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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