Correlation Between Analog Integrations and Long Bon
Can any of the company-specific risk be diversified away by investing in both Analog Integrations and Long Bon 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 Analog Integrations and Long Bon into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Analog Integrations and Long Bon International, you can compare the effects of market volatilities on Analog Integrations and Long Bon 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 Analog Integrations with a short position of Long Bon. Check out your portfolio center. Please also check ongoing floating volatility patterns of Analog Integrations and Long Bon.
Diversification Opportunities for Analog Integrations and Long Bon
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Analog and Long is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Analog Integrations and Long Bon International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Long Bon International and Analog Integrations 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 Analog Integrations are associated (or correlated) with Long Bon. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Long Bon International has no effect on the direction of Analog Integrations i.e., Analog Integrations and Long Bon go up and down completely randomly.
Pair Corralation between Analog Integrations and Long Bon
Assuming the 90 days trading horizon Analog Integrations is expected to generate 5.21 times more return on investment than Long Bon. However, Analog Integrations is 5.21 times more volatile than Long Bon International. It trades about 0.06 of its potential returns per unit of risk. Long Bon International is currently generating about -0.28 per unit of risk. If you would invest 8,960 in Analog Integrations on November 5, 2024 and sell it today you would earn a total of 230.00 from holding Analog Integrations or generate 2.57% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 93.33% |
| Values | Daily Returns |
Analog Integrations vs. Long Bon International
Performance |
| Timeline |
| Analog Integrations |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Long Bon International |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Analog Integrations and Long Bon Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Analog Integrations and Long Bon
The main advantage of trading using opposite Analog Integrations and Long Bon positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Analog Integrations position performs unexpectedly, Long Bon 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 Long Bon will offset losses from the drop in Long Bon's long position.The idea behind Analog Integrations and Long Bon International pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
Other Complementary Tools
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes | |
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume | |
| Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules | |
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. | |
| Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency |