Correlation Between Power Wind and Advanced International
Can any of the company-specific risk be diversified away by investing in both Power Wind and Advanced International 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 Power Wind and Advanced International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Power Wind Health and Advanced International Multitech, you can compare the effects of market volatilities on Power Wind and Advanced International 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 Power Wind with a short position of Advanced International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Power Wind and Advanced International.
Diversification Opportunities for Power Wind and Advanced International
0.59 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Power and Advanced is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Power Wind Health and Advanced International Multite in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Advanced International and Power Wind 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 Power Wind Health are associated (or correlated) with Advanced International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Advanced International has no effect on the direction of Power Wind i.e., Power Wind and Advanced International go up and down completely randomly.
Pair Corralation between Power Wind and Advanced International
Assuming the 90 days trading horizon Power Wind Health is expected to generate 1.12 times more return on investment than Advanced International. However, Power Wind is 1.12 times more volatile than Advanced International Multitech. It trades about 0.05 of its potential returns per unit of risk. Advanced International Multitech is currently generating about -0.37 per unit of risk. If you would invest 11,450 in Power Wind Health on August 29, 2024 and sell it today you would earn a total of 100.00 from holding Power Wind Health or generate 0.87% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Power Wind Health vs. Advanced International Multite
Performance |
| Timeline |
| Power Wind Health |
| Advanced International |
Power Wind and Advanced International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Power Wind and Advanced International
The main advantage of trading using opposite Power Wind and Advanced International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Power Wind position performs unexpectedly, Advanced International 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 Advanced International will offset losses from the drop in Advanced International's long position.| Power Wind vs. Sunny Friend Environmental | Power Wind vs. Cleanaway Co | Power Wind vs. Charoen Pokphand Enterprise | Power Wind vs. TTET Union Corp |
| Advanced International vs. Feng Tay Enterprises | Advanced International vs. Ruentex Materials Co | Advanced International vs. Symtek Automation Asia | Advanced International vs. CTCI 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 Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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