Correlation Between Andes Technology and Champion Building
Can any of the company-specific risk be diversified away by investing in both Andes Technology and Champion Building 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 Andes Technology and Champion Building into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Andes Technology Corp and Champion Building Materials, you can compare the effects of market volatilities on Andes Technology and Champion Building 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 Andes Technology with a short position of Champion Building. Check out your portfolio center. Please also check ongoing floating volatility patterns of Andes Technology and Champion Building.
Diversification Opportunities for Andes Technology and Champion Building
-0.5 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Andes and Champion is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding Andes Technology Corp and Champion Building Materials in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Champion Building and Andes 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 Andes Technology Corp are associated (or correlated) with Champion Building. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Champion Building has no effect on the direction of Andes Technology i.e., Andes Technology and Champion Building go up and down completely randomly.
Pair Corralation between Andes Technology and Champion Building
Assuming the 90 days trading horizon Andes Technology Corp is expected to under-perform the Champion Building. In addition to that, Andes Technology is 1.36 times more volatile than Champion Building Materials. It trades about -0.2 of its total potential returns per unit of risk. Champion Building Materials is currently generating about 0.1 per unit of volatility. If you would invest 996.00 in Champion Building Materials on August 31, 2024 and sell it today you would earn a total of 34.00 from holding Champion Building Materials or generate 3.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Andes Technology Corp vs. Champion Building Materials
Performance |
| Timeline |
| Andes Technology Corp |
| Champion Building |
Andes Technology and Champion Building Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Andes Technology and Champion Building
The main advantage of trading using opposite Andes Technology and Champion Building positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Andes Technology position performs unexpectedly, Champion Building 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 Champion Building will offset losses from the drop in Champion Building's long position.| Andes Technology vs. Taiwan Semiconductor Manufacturing | Andes Technology vs. MediaTek | Andes Technology vs. United Microelectronics | Andes Technology vs. Novatek Microelectronics Corp |
| Champion Building vs. BES Engineering Co | Champion Building vs. Continental Holdings Corp | Champion Building vs. Kee Tai Properties | Champion Building vs. Hung Sheng Construction |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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