Correlation Between Allied Circuit and ANJI Technology
Can any of the company-specific risk be diversified away by investing in both Allied Circuit and ANJI Technology 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 Allied Circuit and ANJI Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Allied Circuit Co and ANJI Technology Co, you can compare the effects of market volatilities on Allied Circuit and ANJI Technology 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 Allied Circuit with a short position of ANJI Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Allied Circuit and ANJI Technology.
Diversification Opportunities for Allied Circuit and ANJI Technology
0.56 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Allied and ANJI is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding Allied Circuit Co and ANJI Technology Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ANJI Technology and Allied Circuit 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 Allied Circuit Co are associated (or correlated) with ANJI Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ANJI Technology has no effect on the direction of Allied Circuit i.e., Allied Circuit and ANJI Technology go up and down completely randomly.
Pair Corralation between Allied Circuit and ANJI Technology
Assuming the 90 days trading horizon Allied Circuit Co is expected to under-perform the ANJI Technology. But the stock apears to be less risky and, when comparing its historical volatility, Allied Circuit Co is 1.01 times less risky than ANJI Technology. The stock trades about -0.09 of its potential returns per unit of risk. The ANJI Technology Co is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 2,960 in ANJI Technology Co on September 13, 2024 and sell it today you would earn a total of 55.00 from holding ANJI Technology Co or generate 1.86% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Allied Circuit Co vs. ANJI Technology Co
Performance |
| Timeline |
| Allied Circuit |
| ANJI Technology |
Allied Circuit and ANJI Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Allied Circuit and ANJI Technology
The main advantage of trading using opposite Allied Circuit and ANJI Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Allied Circuit position performs unexpectedly, ANJI Technology 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 ANJI Technology will offset losses from the drop in ANJI Technology's long position.| Allied Circuit vs. ANJI Technology Co | Allied Circuit vs. Emerging Display Technologies | Allied Circuit vs. U Tech Media Corp | Allied Circuit vs. Ruentex Development Co |
| ANJI Technology vs. TSEC Corp | ANJI Technology vs. United Renewable Energy | ANJI Technology vs. Tainergy Tech Co | ANJI Technology vs. Motech Industries 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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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